Question

An entity has an asset that was classified as held for sale. However, the criteria for it to remain as held for sale no longer apply. The entity should therefore;

Select one:

a. measure the noncurrent asset at the lower of its carrying amount before the asset was classified as held for sale (as adjusted for subsequent depreciation, amortization, or revaluations) and its recoverable amount at the date of the decision not to sell.

b. remeasure the noncurrent asset at fair value.

c. recognize the noncurrent asset at its carrying amount prior to its classification as held for sale as adjusted for subsequent depreciation, amortization, or revaluation.

d. leave the noncurrent asset in the financial statements at its current carrying value.

Answer 1

Answer: Option a is correct i.e measure the noncurrent asset at the lower of its carrying amount before the asset was classified as held for sale (as adjusted for subsequent depreciation, amortization, or revaluations) and its recoverable amount at the date of the decision not to sell.

Reason: As per IFRS 5, Assets which was help for sale but due to non-materialization of sale or any other event, sales do not take place, then such assets fail to be categorised as held for sale. Such assets are recorded in the books of accounts at is carrying amount before the assets were classified as help for sale, adjust for depreciation, amortization, as its lower its recoverable amount.So, The option a is correct.