FAR Impairment · Updated November 2026
Held and Used vs Held for Sale: Why Are the Impairment Rules Different?
Classify what management plans to do with the asset before choosing the impairment model.
Held and used
For applicable long-lived assets held and used, the accounting can involve a recoverability test before measuring impairment.
Held for sale
Once qualifying held-for-sale criteria are met, the measurement framework changes and fair value less applicable selling costs becomes central.
Why classification matters
The same numbers can produce a wrong answer when the wrong impairment model is applied.
Depreciation
Held-for-sale classification can also affect whether depreciation continues.
The takeaway
Classify the asset's status before performing the impairment calculation.
Related Summit guides
FAQ
Do held-and-used assets use the same model as held-for-sale?
No.
Is future cash flow analysis relevant to held-and-used impairment?
Yes under the applicable framework.
Should I calculate fair value first every time?
No. Follow the sequence for the asset classification.