Commonly in a Chapter 11 bankruptcy proceeding, the parties may determine that the best course for the creditors would be a Court-sponsored sale of some or all of the debtor's assets, which can occur through a Court-approved auction under Section 363 of the Bankruptcy Code or as part of the debtor’s reorganization plan under Section 1129 of the Bankruptcy Code. From the perspective of the debtor, such a sale is accounted for consistently with any other divestiture of its operations, even though the sale is supervised and approved by the Court and can involve a substantial portion of the reporting entity's net assets.

See BLG 5.2 for further discussion of each of these types of sales, including the corresponding advantages and accounting implications.