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What are the conditions that must be satisfied for a non-current asset to be reclassified as...

What are the conditions that must be satisfied for a non-current asset to be reclassified as held-for-sale?

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Answer #1

For non-current asset to be reclassified as held-for-sale the following conditions must be met

· Management has a committed plan to sell the asset

· The asset should be immediately available for sale in its present condition and location

· Management has initiated an active programme to locate buyer

· There is high probability of sale within 12 month of asset being classified as held for sale

· The sale price for assets is reasonable compared to its fair value in active market

· The action plan initiated for sale of asset is unlikely that plan with be changed or withdrawn

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