An item of PPE has a carrying amount of $600,000. It is classified as held for sale on 30 September 20X6. At that date its fair value less costs to sell is estimated at $550,000. The asset was sold for $555,000 on 30 November 20X6. The year end of the entity is 31 December 20X6. The PPE had not previously been revalued.

Required
(a) Explain how the classification as held for sale, and subsequent disposal, would be treated in the 20X6 financial statements?
(b) Explain how the above answer would differ if the carrying amount of the asset at 30 September 20X6 was $500,000, with all other figures remaining the same?

Answer rating: 100% (QA)

1 On 30 September 20X6 the asset would be written down to its fair value less costs ... View the full answer