An entity has agreed in a directors’ meeting to sell a building and has tentatively started looking for a buyer for the building. The price of the building has been fixed at P6 and a surveyor has valued the building based on market prices at P5.6M. The entity will continue to use the building until another building has been found with equivalent facilities, and in a suitable location for the office staff, who will not be relocated until the new building has been found. Additionally, the entity is planning to sell part of its business and has actively marketed the business at a fair price but, before the business can be sold, government approval is required, and any sale requires government approval. This means that the sale time is difficult to determine and it may take longer than one year to sell the disposal group. Which of the statements are true? A. The building and the disposal group which is a part of their business can be classified as held-for-sale. B. The building and the disposal group which is a part of their business can be classified as abandoned. C. The building will not be treated as held-for-sale while the disposal group which is a part of their business can be classified as held-for-sale. D. The building will be treated as held-for-sale while the disposal group which is a part of their business cannot be classified as held-for-sale.
An entity has agreed in a directors’ meeting to sell a building and has tentatively started looking for a buyer for the building. The price of the building has been fixed at P6 and a surveyor has valued the building based on market prices at P5.6M. The entity will continue to use the building until another building has been found with equivalent facilities, and in a suitable location for the office staff, who will not be relocated until the new building has been found. Additionally, the entity is planning to sell part of its business and has actively marketed the business at a fair price but, before the business can be sold, government approval is required, and any sale requires government approval. This means that the sale time is difficult to determine and it may take longer than one year to sell the disposal group. Which of the statements are true? A. The building and the disposal group which is a part of their business can be classified as held-for-sale. B. The building and the disposal group which is a part of their business can be classified as abandoned. C. The building will not be treated as held-for-sale while the disposal group which is a part of their business can be classified as held-for-sale. D. The building will be treated as held-for-sale while the disposal group which is a part of their business cannot be classified as held-for-sale.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:An entity has agreed in a directors’ meeting to sell a building and has tentatively started looking
for a buyer for the building. The price of the building has been fixed at P6 and a surveyor has
valued the building based on market prices at P5.6M. The entity will continue to use the building
until another building has been found with equivalent facilities, and in a suitable location for the
office staff, who will not be relocated until the new building has been found. Additionally, the
entity is planning to sell part of its business and has actively marketed the business at a fair price
but, before the business can be sold, government approval is required, and any sale requires
government approval. This means that the sale time is difficult to determine and it may take
longer than one year to sell the disposal group. Which of the statements are true?
A. The building and the disposal group which is a part of their business can be classified as
held-for-sale.
B. The building and the disposal group which is a part of their business can be classified as
abandoned.
C. The building will not be treated as held-for-sale while the disposal group which is a part of
their business can be classified as held-for-sale.
D. The building will be treated as held-for-sale while the disposal group which is a part of their
business cannot be classified as held-for-sale.
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