Question
Argon Noble Limited has approved a formal plan to sell its head office tower to an outside party. A detailed plan has been approved by
Argon Noble Limited has approved a formal plan to sell its head office tower to an outside party. A detailed plan has been approved by the board of directors. The building is on the books at $50 million (net book value). The estimated selling price is $49 million. The company will continue to use the building until the construction of the new head office is complete. Construction has not yet started on the new building, but the company has begun to look for a buyer. (a) Should Argon Noble present its existing head office tower as held for sale? (b) Assume it is now two years later and construction of the new building is complete. The company has moved into the new building. How would the old building be presented on the income statement and statement of financial position under both ASPE and IFRS? The book value of the old building is now $45 million and the fair value is $42 million.
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