This is to confirm that if a property is classified as asset held for sale, no depreciation is to be recorded.
To illustrate, Company ABC entered into Sales & Purchase agreement with 3rd party to dispose one of its property. The Sales & Purchase agreement may take months to complete. In this instance, Company ABC re-classified the property from Property, Plant & Equipment to Asset held for Sale upon entering the Sales & Purchase agreement.
Asset held for sale is de-recognised from the balance sheet upon the completion of the Sales & Purchase agreement.
Sunday, July 18, 2010
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