NONCURRENT ASSET HELD FOR SALE

MULTIPLE CHOICE
1. It is a group to be disposed of by sale or otherwise, together as a group in a
single transaction and liabilities directly associated with those assets that will be
transferred in the transaction.
A. Disposal group
B. Discontinued Operation
C. Noncurrent asset
D. Cash generating unit

2. An entity shall classify a noncurrent asset or disposal group as held for sale
when
A. The carrying amount of the asset or disposal group will be recovered through
a sale transaction
B. The carrying amount of the asset or disposal group will be recovered through
a continuing use
C. The noncurrent asset or disposal group is to be abandoned
D. The noncurrent asset or disposal group is idle

PROBLEM 1
Tinapa Company accounts for noncurrent assets using the cost model. On October 1,
2020, the entity classified a noncurrent asset as held for sale. At the date, the carrying
amount was P9, 200,000, the fair value was estimated at P2, 200,000 and the cost of
disposal at P500, 000.
On December 15, 2020, the asset was sold for net proceeds of P1, 850,000.
What amount should be included as an impairment loss in the statement of
comprehensive income for the year ended December 31, 2020?
A. 7,000,000
B. 7,500,000
C. 7,350,000
D. 0
PROBLEM 2
Bugas Company accounts for noncurrent assets using the cost model. On October 30,
2020, the entity classified a noncurrent asset as held for sale. At the date, the carrying
amount was P8, 500,000, the fair value was estimated at P1, 100,000 and the cost of
disposal at P150, 000. On November 20, 2020, the asset was sold for net proceeds of
P800, 000.
What amount should be included as loss on disposal in the statements of
comprehensive income for the year December 31, 2020?
A. 850,000
B. 200,000
C. 150,000
D. 0
PROBLEM 3
Lockdown Company accounts for noncurrent assets using the cost model. On Decent
31, 2020, the entity classified a noncurrent asset as held for sale. At that date, the
carrying amount was P1, 120,000, the fair value was estimated at P2, 150,000 and the
cost of disposal at P150, 000. The asset was sold on March 31, 2021 for P2, 120,000.
3. At what amount should the asset be measured on December 31, 2020?
A. 2,500,000
B. 2,150,000
C. 2,120,000
D. 1,120,000
PROBLEM 4
On April 1, 2020, Wanmeter Company has a machine with a cost of P1, 000,000 and
accumulated depreciation of P750, 000. On April 1, 2020, the entity classified the
machine as held for sale and decided to sell the matching within 1 year. On April 1,
2020, the machine had an estimated selling price of P100, 000 and a remaining useful
life of 2 years. It is estimated that selling cost associated with the disposal of the
machine had increased to P150, 000 with estimated selling cost of P 20,000.
4. What amount should be recognized as gain on reversal of impairment on December
31, 2015?
A. 93,750
B. 73,750
C. 60,000
D. 40,000
PROBLEM 5
On January 1, 2015, Burador Company classified as held for sale a noncurrent asset
with a carrying amount of P5, 000,000. On this date, the asset is expected to be sold for
P4, 600,000. Reasonable disposal cost to be incurred on sale is expected as P200,
000. By December 31, 2020, the asset had not been sold and management decided to
place back the noncurrent asset into operations. On the same date, the entity estimated
that the noncurrent asset is expected to be sold at P 4,300,000 with disposal cost of
P50, 000. The carrying amount of the noncurrent asset is P 4,000,000 on December
31.2020 if the noncurrent asset is not classified as held for sale.
What is the carrying amount of the asset that should be reported on December 31,
2020?
A. 5,000,000
B. 4,000,000
C. 4,400,000
D. 4,250,000
PROBLEM 6
Lucky Me Company purchased equipment for P5, 000,000 on January 1, 2020 with a
useful life of 10 years and no residual value. On December 31, 2021, the entity
classified the asset as held for sale. The fair value of the equipment on December 31,
2021 is P 3,300,000 and the cost of disposal is P100, 000.On December 31, 2022, the
fair value of equipment is P 3,800,000 and the cost of disposal is P200, 000.
On December 31, 2022, the entity believed that the criteria for classification as held for
sale can no longer be met. Accordingly, the entity decided not to sell the asset but to
continue to use it.
What is the impairment loss to be considered on December 31, 2021?
A. 1,300,000
B. 800,000
C. 700,000
D. 0
What is the measurement of the equipment that ceases as held for sale on December
31, 2022?
A. 3,200,000
B. 4,000,000
C. 3,500,000
D. 3,600,000
What amount should be recognized in profit or loss as a result of the reclassification in
2022?
A. 800,000
B. 300,000
C. 400,000
D. 0

PROBLEM 7
On January 1, 2015, Odong Company classified as held for sale a noncurrent asset with
a carrying amount of P5, 000,000. By December 31, 2020, the asset had not been sold
and management decided to place back the noncurrent asset into operations. On the
same date, the entity estimated that the noncurrent asset is expected to be sold at P
9,600,000 with disposal cost of P80, 000. The carrying amount of the noncurrent asset
is P 8,000,000 on December 31.2020 if the noncurrent asset is not classified as held for
sale.
What is the carrying amount of the asset that should be reported on December 31,
2020?
A. 9,520,000
B. 8,000,000
C. 9,400,000
D. 8,990,000
PROBLEM 8
Matthew Company accounts for noncurrent assets using the cost model. On October 1,
2021, the entity classified a noncurrent asset as held for sale. At the date, the carrying
amount was P8, 500,000, the fair value was estimated at P5, 000,000 and the cost of
disposal at P200, 000. On December 15, 2021, the asset was sold for net proceeds of
P3, 200,000.
1. What amount should be included as an impairment loss in the statement of
comprehensive income for the year ended December 31, 2021?
PROBLEM 9
Miyami Company purchased equipment for P8, 000,000 on January 1, 2015 with a
useful life of 10 years and no residual value. On December 31, 2016, the entity
classified the asset as held for sale.
The fair value of the equipment on December 31, 2026 is P 3,300,000 and the cost of
disposal is P100, 000.On December 31, 2017, the fair value of equipment is P
3,200,000 and the cost of disposal is P1,200, 000.
On December 31, 2017, the entity believed that the criteria for classification as held for
sale can no longer be met. Accordingly, the entity decided not to sell the asset but to
continue to use it.
What is the impairment loss to be considered on December 31, 2016?
A. 3,200,000
B. 1,300,000
C. 1,000,000
D. 3,000,000
What is the measurement of the equipment that ceases as held for sale on December
31, 2017?
A. 3,200,000
B. 5,600,000
C. 3,780,000
D. 0
What amount should be recognized in profit or loss as a result of the reclassification in
2017?
A. 2,000,000
B. 1,000,000
C. 4,500,000
D. 0