Assets Held For Sale
What are Assets Held For Sale?
Assets held for sale are assets that a company intends to sell in the near future, usually within one year. These assets are typically classified as "held for sale" on the company's balance sheet and are reported at their net realizable value, which is the estimated amount that the asset will sell for less any estimated costs to sell the asset.
Examples of assets that may be held for sale include real estate, investment securities, and equipment. When a company holds an asset for sale, it is generally not using the asset in its operations and is instead preparing it for sale to a third party.
The classification of assets as held for sale is important because it affects how the asset is valued on the balance sheet. Assets held for sale are reported at their net realizable value, which may be lower than the asset's historical cost or its carrying value on the balance sheet. This can impact the company's financial statements, including its net income and shareholder equity.