Correction
Management's intent is only part of the evidence. Classify a long-lived asset or disposal group as held for sale only when all applicable criteria are met as of the reporting date.
Check all six criteria
Confirm that authorized management has committed to a sale plan, the asset or component is available for immediate sale, the company is actively seeking a buyer, a completed sale is probable within the required period, the asking price is reasonable compared with current fair value, and a major change to or withdrawal from the plan is unlikely.
Only after classification is supported should the company apply the held-for-sale measurement, depreciation, presentation, and disclosure consequences. For a disposal group, measure assets and liabilities governed by other Topics under those Topics before applying the long-lived-asset rule.
ASC 360-10-45-9 contains the six classification criteria. ASC 360-10-35-43 supplies the measurement and depreciation consequences after classification.
When this mistake may appear
- A board memo, broker discussion, restructuring idea, or disposal plan mentions a possible asset sale.
Your work may contain this mistake if:
- Stops depreciation before the classification date.
- Uses an unsigned intention as the complete criterion set.
- Carries a held-for-sale asset at an unsupported expected selling price.