There\u2019s an asset on your balance sheet you\u2019re not using and you plan to sell. Say it\u2019s carrying value is 7,500 and what you aim to get for it is close to it\u2019s carrying value. However, as it turns out, you get serious offers for the asset for 5,000. No doubt you can see that your asset is valued higher you\u2019re likely to get for it once you sell it.\u00a0<\/p>\n
This 5,000 is something people would say is the asset\u2019s market value, i.e. the price third parties are willing to pay for the asset under the presumption of normal market and sales condition, i.e. you\u2019re not in need of selling it giving an indication you\u2019d be willing to sell it below market value just to get rid of it since you\u2019re for an example in need of money.<\/p>\n
So for something that\u2019s with it\u2019s value at 7,500 on your balance sheet you\u2019d get 5,000. As such you\u2019d earn a loss of 2,500. Once the offer is seriuos in the sense that you plan to accept it, regardless of when you actually make the transaction, you should recognize the loss immediately. Why?<\/p>\n
Such a loss arising from a future transaction is today an indication that your asset is in fact impaired and carried on the balance sheet with higher value than it\u2019s market value would be. Would you be using the asset, you could argue that the value in use for you is above it\u2019s carrying value and that would be the end of that. No loss should be recognized then. However, once you plan to sell the asset, the value in use is secondary and the selling price becomes far more important.<\/p>\n","protected":false},"excerpt":{"rendered":"
There\u2019s an asset on your balance sheet you\u2019re not using and you plan to sell. Say it\u2019s carrying value is 7,500 and what you aim to get for it is close to it\u2019s carrying value. However, as it turns out, you get serious offers for the asset for 5,000. No doubt you can see that […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[56],"tags":[],"class_list":["post-4947","post","type-post","status-publish","format-standard","hentry","category-1-5-4-utilizing--selling-and-disposing-of-assets"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4947","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=4947"}],"version-history":[{"count":1,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4947\/revisions"}],"predecessor-version":[{"id":4948,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4947\/revisions\/4948"}],"wp:attachment":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=4947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=4947"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=4947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}