Held for Sale Does Not Automatically Mean Discontinued Operation
Held-for-sale classification and discontinued-operations presentation answer different accounting questions.
Held for sale
An asset or disposal group can qualify for held-for-sale accounting when the applicable criteria are satisfied, changing measurement and depreciation treatment.
Discontinued operation
Separate discontinued-operations presentation generally requires a qualifying strategic shift with a major effect on operations or financial results.
Why they differ
A planned sale can satisfy held-for-sale rules but still be too small to qualify as a discontinued operation.
Presentation
Qualifying discontinued operations are presented separately from continuing operations under applicable rules.
The takeaway
Held for sale is an asset-classification issue. Discontinued operations requires a qualifying strategic shift and separate presentation.
Related Summit guides
FAQ
Does every asset sale become a discontinued operation?
No.
Can a disposal group be held for sale?
Yes.
Can held-for-sale classification affect depreciation?
Yes.