Non-current Assets Held for Sale
Fixed assets you have decided to sell within a year, moved out of PPE and shown at the lower of book value or sale price. On the Balance Sheet.
In detail
Non-current Assets Held for Sale records fixed assets the company has firmly decided to sell within the next twelve months and is actively marketing: a van put up for sale, a building no longer needed. NFRS 5 moves them out of Property, Plant and Equipment into current assets at the lower of their book value and the expected sale price less selling costs, and depreciation stops from that day. The transfer entry moves out both cost and accumulated depreciation so only the net book value arrives. On sale, the difference between proceeds and this balance goes to Gain on Disposal of Assets or an expense. If the sale plan is dropped, the asset goes back to PPE.
Formula
Carrying value = Lower of (Cost - Accumulated Depreciation) and (Expected sale price - Costs to sell); no further depreciation.
Accounting entry
| Account | Debit | Credit |
|---|---|---|
| Non-current Assets Held for Sale | Rs 3,00,000 | |
| Accumulated Depreciation | Rs 1,50,000 | |
| Vehicles | Rs 4,50,000 |
How to record it in BRAccount
- 01Record the board decision to sell and the expected price.
- 02Go to Assets > Asset, open the vehicle and note its cost and accumulated depreciation to date.
- 03By Journal Entry, debit this account for net book value and Accumulated Depreciation for its balance; credit Vehicles for cost.
- 04Submit. The entry above posts for a van listed for sale, and the Asset's depreciation is stopped.
- 05On sale, post the proceeds by Payment Entry or Journal Entry against this account with the gain or loss.
When to use it
Post by Journal Entry when the board decides to sell a building or vehicle and a buyer is being sought. Stop depreciating it.
Example from the demo books
Dr Non-current Assets Held for Sale Rs 3,00,000, Dr Accumulated Depreciation Rs 1,50,000, Cr Vehicles Rs 4,50,000 for a van listed for sale.