Which of the following is a requirement for a property to be classified as held for sale?
Sale will be completed in more than one year from the classification date
Management is committed to a plan to sell it
Must be being marketed at a price below its current fair value
Significant changes to the plan to sell must be likely
For a property to be classified as held for sale, the following requirements must be met, as per the principles outlined in the reference text:
- Management must be committed to a plan to sell the property.
- The property should be actively marketed for sale.
- The sale is expected to be completed within one year from the classification date, and
- The property should be available for immediate sale in its present condition, meaning it can be sold in its current state without requiring significant modifications or renovations.
Therefore, the correct answer is that management must be committed to a plan to sell the property. The other options you've listed are either incorrect or not part of the standard criteria for classifying an asset as held for sale.
