Sale expected within a year

Learning objectives

• Determine whether the sale is expected to be completed within one year from the date of classification.L1, L2

Normative references

• IFRS 5 §8Highly probable sale: management at the appropriate level is committed to a plan, an active programme to locate a buyer has been initiated, the asset is actively marketed at a price that is reasonable in relation to its current fair value, the sale is expected to be completed within one year from classification (except as permitted by para. 9), and significant changes to the plan or its withdrawal are unlikely; the probability of shareholders' approval is considered.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

2 questions

• The expectation that the sale will be completed within one year is one of the items used to judge that a sale is highly probable.L1
• On 30 September, Telmar meets all the items of a plan to sell an industrial site. The sale is expected in May of the following year, i.e. after the 31 December closing but within one year. Which conclusion is consistent with the timing item?L2