3.1 Overview

An asset (disposal group) is classified as held for sale once all of the criteria in ASC 360-10-45-9 through 45-11 are met. The entity recognizes a loss, if necessary, to adjust the asset’s (disposal group’s) carrying amount to its fair value less cost to sell in the period in which the held-for-sale criteria are met. The carrying amount of the asset (disposal group) is adjusted in each reporting period for subsequent increases or decreases in its fair value less cost to sell, except that the adjusted carrying amount cannot exceed the carrying amount of the asset (disposal group) at the time it was initially classified as held for sale. Any gain or loss from the sale of the asset (disposal group) that was not previously recognized is recognized on the date of sale. Long-lived assets are not depreciated or amortized while they are classified as held for sale.

The held-for-sale guidance and the discontinued-operations presentation guidance in ASC 205 and ASC 360 apply when an entity is planning to sell or otherwise dispose of parts of its operations, not when the entity is being sold in its entirety. See Example 5-2 for more information.