Liabilities Held for Sale Non Current
Long-Term Liabilities Tied to Assets or Businesses Classified as Held for Sale
Liabilities Held for Sale Non Current represent obligations that were originally classified as non-current (due beyond 12 months) but are now part of a disposal group or directly associated with non-current assets held for sale. When a company commits to selling a business unit, division, or major asset, these liabilities are reclassified and presented separately on the balance sheet under accounting rules (IFRS 5 and US GAAP).
Definition and Purpose
This item includes non-current liabilities that will transfer with a disposal group or asset the company plans to sell. The 'non-current' tag reflects their original maturity, even though the pending sale makes the group current in substance.
Common examples: long-term borrowings secured by the asset, deferred liabilities, provisions, or pension obligations related to the business being divested.
Reclassification signals strategic restructuring—separates exiting obligations from continuing operations.
Classification Criteria
Held-for-sale status requires:
- Asset/disposal group available for immediate sale.
- Sale highly probable within one year.
- Active marketing at reasonable price.
- Management committed to plan.
Once met, the entire disposal group's assets and liabilities are reclassified separately—no offsetting allowed.
Balance Sheet Presentation
Under IFRS 5 and US GAAP:
- Presented as separate sections: 'Assets held for sale' and 'Liabilities held for sale'.
- Many reports use 'Non Current' suffix to preserve original maturity distinction.
- IFRS: Typically current in presentation; no restatement of comparatives.
- US GAAP: May re-present prior periods for discontinued operations.
Major classes disclosed on face or in footnotes.
Measurement Rules
Key differences from assets:
- Liabilities: Remain at carrying amount—no fair value less costs to sell.
- Assets: Measured at lower of carrying amount and fair value less costs to sell.
- Impairment tested for disposal group as a whole.
- Continue recognizing interest/expenses on these liabilities.
No depreciation/amortization on related held-for-sale assets while classified.
Analytical Importance
This line item provides insight into:
- Upcoming divestitures or portfolio streamlining.
- Impact on future leverage (liabilities removed post-sale).
- Cleaner view of core ongoing operations.
- Potential gains/losses on disposal.
Adjust ratios (debt-to-equity, net debt) by excluding these items for continuing business analysis.
Key Takeaways
Liabilities Held for Sale Non Current are long-term obligations bundled with assets/businesses slated for sale.
Reclassified separately when disposal is highly probable within 12 months (IFRS 5 / US GAAP).
Retains 'non-current' descriptor in many presentations despite current economic reality.
Measured at carrying amount; related expenses continue.
Indicates corporate restructuring—critical for evaluating ongoing leverage and performance.
Review footnotes for composition and expected disposal timing.
Liabilities Held for Sale Non Current
Long-Term Liabilities Tied to Assets or Businesses Classified as Held for Sale
Liabilities Held for Sale Non Current represent obligations that were originally classified as non-current (due beyond 12 months) but are now part of a disposal group or directly associated with non-current assets held for sale. When a company commits to selling a business unit, division, or major asset, these liabilities are reclassified and presented separately on the balance sheet under accounting rules (IFRS 5 and US GAAP).
Table of Contents
Definition and Purpose
This item includes non-current liabilities that will transfer with a disposal group or asset the company plans to sell. The 'non-current' tag reflects their original maturity, even though the pending sale makes the group current in substance.
Common examples: long-term borrowings secured by the asset, deferred liabilities, provisions, or pension obligations related to the business being divested.
Reclassification signals strategic restructuring—separates exiting obligations from continuing operations.
Classification Criteria
Held-for-sale status requires:
- Asset/disposal group available for immediate sale.
- Sale highly probable within one year.
- Active marketing at reasonable price.
- Management committed to plan.
Once met, the entire disposal group's assets and liabilities are reclassified separately—no offsetting allowed.
Balance Sheet Presentation
Under IFRS 5 and US GAAP:
- Presented as separate sections: 'Assets held for sale' and 'Liabilities held for sale'.
- Many reports use 'Non Current' suffix to preserve original maturity distinction.
- IFRS: Typically current in presentation; no restatement of comparatives.
- US GAAP: May re-present prior periods for discontinued operations.
Major classes disclosed on face or in footnotes.
Measurement Rules
Key differences from assets:
- Liabilities: Remain at carrying amount—no fair value less costs to sell.
- Assets: Measured at lower of carrying amount and fair value less costs to sell.
- Impairment tested for disposal group as a whole.
- Continue recognizing interest/expenses on these liabilities.
No depreciation/amortization on related held-for-sale assets while classified.
Analytical Importance
This line item provides insight into:
- Upcoming divestitures or portfolio streamlining.
- Impact on future leverage (liabilities removed post-sale).
- Cleaner view of core ongoing operations.
- Potential gains/losses on disposal.
Adjust ratios (debt-to-equity, net debt) by excluding these items for continuing business analysis.
Key Takeaways
Liabilities Held for Sale Non Current are long-term obligations bundled with assets/businesses slated for sale.
Reclassified separately when disposal is highly probable within 12 months (IFRS 5 / US GAAP).
Retains 'non-current' descriptor in many presentations despite current economic reality.
Measured at carrying amount; related expenses continue.
Indicates corporate restructuring—critical for evaluating ongoing leverage and performance.
Review footnotes for composition and expected disposal timing.
Related Terms
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