Reference no: EM132698072

Problem 1: Noncurrent asset or disposal group is classified as held for sale when the asset is available from immediate sale and the sale is highly probable. For the sale to be highly probable, which of the following statements is incorrect?

Group of answer choices

Option 1: An active program to locate a buyer and complete the plan must have been indicated.

Option 2: The sale is expected to qualify for recognition as a completed sale within two years from the date of classification of the asset as held for sale.

Option 3: Management must be committed to a plan to sell the asset.

Option 4: The asset must be actively marketed for sale at a reasonable price in relation to the current fair value.

Problem 2: What is the treatment of any gain on a subsequent increase in the fair value less cost of disposal of a noncurrent asset classified as held for sale?

Group of answer choices

Option 1: The gain shall be recognized in full.

Option 2: The gain shall be recognized but only in retained earnings.

Option 3: The gain shall be recognized but not in excess of the cumulative impairment loss previously recognized.

Option 4: The gain shall not be recognized.