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IFRS 5: NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS -…
IFRS 5: NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
Non-current Assets Held For Sale
Criteria to be classified as held for sale
The asset must be available for
immediate sale in its present condition.
The sale must be
highly probable
.
Unlikely that the plan to sell the asset will change.
Management must be committed to a plan to sell.
The sale price of the asset must be reasonable.
Active programme in place to locate for a buyer.
Sale is expected to occur within one year from the date of classification as held for sale.
Disposal group definition
A group of assets to be disposed of,
together as a group in a single transaction
and
associated liabilities also transferred to new owner in a single transaction.
Measurement
Step 5
: Presentation
:check: As single amounts
:check: On the face of SOFP
:check: As current assets and current liabilities
:check: Separately from other assets and liabilities
Step 4
: Changes in fair value less costs to sell after the classification date are recognised as a further impairment loss
:!!: Gain in fair value less costs to sell cannot be recognised exceed cumulative impairment losses to date
Step 1
: Before classification as held for sale, asset is measured in accordance with the applicable IFRS
Step 3
: Non-current assets/disposal groups classified as held for sale are
not depreciated/amortised
Step 2
: At the date of classification, asset is written down to
fair value less costs to sell
if it is
lower than carrying amount
i) Compare carrying amount with fair value less costs to sell
ii) Any impairment loss is straight up charged in the profit or loss
Discontinued Operation
A component of an entity that either
has been disposed of
or
is classified as held for sale
, and:
i) A separate major line of business or geographical area of operations
ii) A single coordinated plan to dispose of a separate major line of business or geographical area of operations
iii) A subsidiary acquired exclusively with a view to resale
Non-current Assets to be abandoned
Non-current assets/disposal groups to be abandoned are
not classified as held for sale
.
This includes assets:
i) Used to the end of their economic life
ii) Closed rather than soled