When is a "disposal group" classified as held for sale?
A)When a component of an entity either has been disposed of or is classified as held for sale.
B)When the group of assets is both available for sale and expected to sell within a year.
C)When a group of assets and liabilities are to be disposed in several transactions.
D)When the carrying value for a group of current assets will be recovered through sale rather than continuing use.

Question

Quizplus · Accepted Answer

A disposal group is classified as held for sale when it is both available for sale and is expected to be sold within a year (as per IFRS 5). Option A is incorrect because a component of an entity being disposed or held for sale does not necessarily mean that the entire disposal group is held for sale. Option C may or may not be correct depending on whether the assets and liabilities in the group can be expected to be disposed of within a single transaction or multiple transactions. Option D is incorrect because the recovery of carrying value through sale rather than continuing use does not necessarily determine whether a disposal group is held for sale.

When Is a "Disposal Group" Classified as Held for Sale