When an asset is held for sale
A) it must relate to a discontinued operation.
B) the entity must continue to record depreciation for the asset.
C) the asset is remeasured to the lower of carrying (book) value and fair value less costs to sell.
D) the asset is remeasured to the lower of fair value and carrying (book) value.

Question

Quizplus · Accepted Answer

When an asset is held for sale, it must be remeasured to the lower of carrying (book) value and fair value less costs to sell. This is in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Option A is not necessarily true, as an asset held for sale may be part of an ongoing operation. Option B is incorrect because depreciation should cease when the asset is classified as held for sale. Option D is not correct because IFRS 5 specifies that the asset must be written down to the lower of carrying (book) value and fair value less costs to sell rather than just fair value.

When an Asset Is Held for Sale