Please enable JavaScript.
Coggle requires JavaScript to display documents.
IFRS 5 Non-current assets held for sale (Classification of non-current…
IFRS 5 Non-current assets held for sale
SCOPE
Applies to most non-current assets as per IAS 1
Does not apply
Deferred tax assets
Assets arising from employee benefits
Financial assets accounted for in accordance with FV under IAS 40 (Investment property under the FV modek)
Agriculture IAS 41
Group of contracts within the scope of IFRS 17 Insurance contracts
Classification of non-current assets held for sale or for distribution to owners
When carrying amount if non-current asset will mainly be recovered through sale NOT continued use:
Available for immediate sale in present condition
sale must be highly probable
Management have committed plan
Active program to locate buyer and compete the plan must have been initiated
Consider shareholder's approval
Price reasonable
Complete the sale within one year EXCEPT if the delay is due events out of the entities controls and there is sufficient evidence that they remain committed to the plan to sell the non-current asset
Even if loss of control of sub and remain NCI the NCA and NCL shall remain held for sale when the requirements are met regardless if becomes NCI
Include exchanges of non-current assets for others when exchange has commercial substance (IAS 16)
Acquires non-current asset with view to its subsequent disposal thus classify under IFRS 5 at the acquisition date given certain requirements
Can be an adjusting event after the reporting date if the requirements are met post year end but prior to AFS being authorized
Held for distribution when committed to distribute the asset
available immediately in present condition
Highly probable
Non-current assets that have been abandoned
No longer IFRS 5 classification
Measurement of non-current assets (group disposals) classified as held for sale
measurement
Held for Sale
Lower of CA and FV less costs to sell (IFRS13)
Newly acquired and mets IFRS 5 and is part of business combination then measured at FV less costs to sell
Sale beyond one year measure cost to sell at PV and account for TVM as financing cost
Immediately prior to initial IFRS 5 measurement non-current assets must be measured with their normal standard (ei reval/fair value/dep)
Held for distribution
lower CA and FV less costs to distribute
No depreciation under IFRS 5 still recognize interest and other expenses related to the liabilities of group disposal
Recognition of impairment losses and reversals
Impairment loss for any initial or subsequent write down to FV -costs to sell if not previously recognized
Recognize a gain for subsequent increase in FV -costs to sell NOT IN EXCESS of cumulative impairment loss that has been recognized under IFRS 5 or IAS 36 (impairment standard)
Group disposals have specific things
Gain/loss not previously recognized by date of sale of NCA shall be recognized at date of derecognition
Derecognition see IAS 16 or IAS 38
Changes to a plan of sale or to a plan of distribution to owners
No longer meet requirements then cease to classify under IFRS 5 unless changes between held for sale and held for distributions
No longer IFRS 5 then at the lower of:
CA if had never been IFRS 5
Recoverable amount at the date subsequent not to sell or distribute