Assets HFS.. CLASSIFICATION

Question 1

When an old building is actively marketed for sale gonna be sold in less than 4 months. How is it classified.

Answer 1

1. RECLASSIFIED as HFS
2. Classified as a Current Asset instead of PPE
3. it will no longer be depreciated.
4. It will be held at NRV rather than Historical cost.

Question 2

How is equity securities and debt securities accounted

Answer 2

Equity security if held as investment are carried at fair value as non current assets if it is not sold in the near future.

Except if
1. Equity method is used
2. Equity security will be consolidated and therefore eliminated.
3. The Fair value cannot be readily determined.
If no 3 is the case investment will be carried at cost and impaired

Debt security held as investment can be classified as trading, AFS or or HTM