Romeo Partners is scaling back operations; the partnership has the following assets on its books that it is considering for sale:
a. The partnership has $120,000 in trade accounts receivable that it could sell to a factoring company in return for $105,000. Romeo has done this in the past and sees no impediments to doing so again.
b. Romeo has a parcel of land that is currently vacant. The land is located in an area of the city that was undeveloped and Romeo had purchased it a number of years ago in anticipation of growth in the city’s population and the development of that section of the city. Actual population growth has been below expectations and has in fact been declining in the past two years. It is not clear whether a willing buyer can be found under these conditions.
c. Romeo’s operations are housed in an office and a separate storage facility. Romeo owns the land on which these facilities reside. The partnership is able to vacate the storage facility on short notice and there is an active market for similar storage. As for the office, Romeo still plans to continue its operations, so it does not foresee vacating the office space in the immediate future.
Required:
Determine whether Romeo should present the assets described above as non-current assets held for sale.