Identification and Classification Non-current assets held for sale are assets that an entity intends to sell in their present condition, and their sale is expected to generate cash flows. The classification as held for sale occurs when the asset is available for immediate sale, and the sale is highly probable.

Step 2: Measurement Upon classification as held for sale, the assets are measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss is recognized, and subsequent adjustments are made based on this lower of cost or market principle.

Step 3: Presentation and Disclosure Assets held for sale are presented separately on the balance sheet, and discontinued operations are disclosed separately in the financial statements. The results of discontinued operations are reported net of tax, and additional disclosures are made to provide clarity on the financial impact of the disposal.

Objective Type Question: What is the key criterion for classifying an asset as held for sale?

A) Availability for immediate sale and high probability of sale 

B) Long-term retention and potential future sale 

C) Uncertain selling prospects and market conditions 

D) Minimal depreciation since acquisition