Recovery through sale

Learning objectives

• Explain that the classification applies to assets whose carrying amount will be recovered principally through a sale transaction rather than through continuing use.L1, L2

Normative references

• IFRS 5 §6Principle: an asset or disposal group is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use.

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

2 questions

• Under IFRS 5, which principle underlies the classification of a non-current asset as held for sale?L1
• Valdor operates a warehouse still used every day in its business. Management says it might sell it one day if a good offer came up, with no plan or action under way. What is the appropriate classification at closing?L2