The lower of the two amounts

Learning objectives

• Calculate the measurement of an asset held for sale: the lower of its carrying amount and fair value less costs to sell.L1, L2, L3
• Justify the selection of the lower amount and the related journal entry in a case involving several assets.L3

Normative references

• IFRS 5 §15Measurement: an asset (or disposal group) classified as held for sale is measured at the lower of its carrying amount and fair value less costs to sell (the starting carrying amount results from para. 18).

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

3 questions

• At what amount is an asset classified as held for sale measured?L1
• On 30 June, Maren classifies a press as held for sale. Its carrying amount, after updating depreciation, is {carrying_amount}. Case assumption: its fair value is {fair_value} and the costs to sell are estimated at {costs_to_sell}. Calculate the fair value less costs to sell, then the amount at which the press is measured.L2
• A disposal group has a carrying amount of €1,200,000 after updating its items. Case assumption: its fair value is €1,250,000 and the costs to sell are €80,000. At what amount and with what effect is the group measured?L3