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Noncurrent assets and disposal Groups classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.
Noncurrent assets and disposal groups are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
Property, plant and equipment and intangible assets once classified as held for sale are not depreciated.
assets held for sale , should not be depriciated becuase of exclsusion from business operation , if continue to be depriciated affects on operational cash flows as well as on profits,
simply like as retirement from job. once retired recieve the pension funds, similary once class as held for sale, wait for recieving the sum on sales.
Depreciation is calculated on basis of two situations:1- Life of Asset 2- Worth/Value of Assets
Such Assets are not more than one year life and convertible in liquid assets within minimum time frame.
Because these assets are not being used in the production or administration.
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