Document when an asset qualifies as held for sale under IFRS

Management may discuss selling equipment months before there is an executable disposal plan. Keep that discussion distinct from the date the accountant approves held-for-sale classification. A draft broker proposal, internal budget or decision to stop using the asset may be relevant evidence without satisfying the complete accounting assessment.

IFRS 5 requires the asset or disposal group to be available for immediate sale in its present condition and the sale to be highly probable. The assessment includes management commitment, active efforts to find a buyer and realistic marketing terms. A qualified reviewer should apply the requirements to the actual plan and any required approvals.

Collect management approvals, broker instructions, marketing materials, pricing support and evidence of buyer contact. Identify conditions that prevent an immediate sale, such as required work or unresolved permissions. Explain whether those conditions are usual for this type of asset or specific obstacles that need technical assessment.

Show when each condition changed. Suppose management approved a sale in September but the asset could not be sold in its existing condition until November. Those dates matter to a September reporting assessment even if the subsequent sale succeeds. The final outcome should not be used to rewrite which facts existed at the earlier reporting date.

Give the reviewer a transaction timetable with the remaining actions, responsible parties and approval dependencies. IFRS 5 generally expects completion within a year of classification, with specified exceptions for certain delays outside the entity's control. A long timetable needs its own analysis; the exception should not become a routine extension entered whenever the plan slips.

Preserve evidence that management remains committed if circumstances change. A withdrawn offer, a materially higher asking price or a decision to keep using the asset can require reassessment. Ask the accounting owner to specify which developments must be reported before the next close instead of relying on the asset team to infer the financial-reporting consequences.

Provide the recorded carrying amount and support for expected sale proceeds and selling costs. IFRS 5's measurement rules include a lower-of comparison and exceptions for specified assets. Have the accountant identify the applicable scope before using a single spreadsheet formula across a disposal group containing different kinds of assets and liabilities.

Once classification is approved, confirm the required depreciation and presentation changes in the accounting system. Keep the effective date tied to the conclusion. A broker's estimate can inform a valuation, but it does not itself authorize stopping depreciation or recoding the asset in the published statements.

At each reporting date, update the sale status, measurement evidence and unresolved conditions. Retain prior approved conclusions and explain any change. On completion, reconcile the signed sale terms, proceeds, disposal costs and register removal. If the plan ends without a sale, obtain a fresh accounting assessment before returning the asset to its previous schedule.