Every now and then it happens that you’re going to get rid off one or some of your equipment or machinery. It could be even buildings or rooms that you own which are part of your property. Regardless of what it is exactly, matter of fact is that there comes a time you’re going to sell some of those items. Continue reading
A company may for whatever reason at any given point in time decide to give up on some of its assets. This may be due to discontinuing operations, replacement or something else, however, there are specific treatments for such assets on the balance sheet.
The first and foremost condition is that the asset must be available for immediate sale in its current condition. If it’s continued to be in use, it is questionable if the asset is in fact subject to be sold immediately.
Second condition that must be met is the fact that the sale must be highly probable. This is defined by having a selected buyers who have shown interest, existing market for the asset, reasonable price etc. For any transaction to be probable, obviously an imminent intent and an action plan must be enforced. If any approvals are required, those should also be obtained to ensure the highest probability.