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Hi sir,
When classifying an asset as Held for sale, should the asset meet all the conditions in IFRS 5 or one of the condition should be met?
Thank you 🙂
Short answer – ALL.
Long answer:
6 An entity shall classify a non-current asset (or disposal group) as held for
sale if its carrying amount will be recovered principally through a sale
transaction rather than through continuing use.
7 For this to be the case, the asset (or disposal group) must be:
– available for immediate sale in its present condition subject only to terms that are usual and
customary for sales of such assets (or disposal groups)
AND
– its sale must be highly probable.
8 For the sale to be highly probable:
– the appropriate level of management must be committed to a plan to sell the asset (or disposal group)
AND
– an active programme to locate a buyer and complete the plan must have been initiated.
FURTHER, the asset (or disposal group) must be actively marketed for sale at a
price that is reasonable in relation to its current fair value.
IN ADDITION, the sale should be expected to qualify for recognition as a completed sale within one year from the date of classification …
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