Which condition must be met for a non-current asset to be classified as held for sale under IFRS 5?

For a non-current asset to be classified as held for sale under IFRS 5, it is essential that it must be ready for immediate sale in its present condition. This readiness implies that the asset is actively being marketed for sale at a price that is reasonable in relation to its fair value, and that the sale is expected to occur shortly. The classification as 'held for sale' reflects the intention of management to dispose of the asset and signals to users of the financial statements that the asset will no longer be used for the entity’s operational purposes.

Meeting this condition also means that the asset must be likely to sell within one year from the classification date, not just be ready but actively marketed, which is an important aspect in the context of measuring and reporting the asset's value.

In contrast to the other options, while a timeframe for sale is considered, it is not strictly limited to two years, and there is no requirement for the asset to continue to be depreciated; instead, once classified as held for sale, the asset will not be subject to further depreciation. Lastly, it is not a requirement for an asset held for sale to be recorded as a liability; the focus is on the asset's status and potential sale rather than its associated