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IFRS 5: Non-Current Assets Held for Sale - Coggle Diagram
IFRS 5: Non-Current Assets Held for Sale
Objective
Specify Acc treatment
Recognition - Meet criteria
Measurement >> Lower of CA or FLCTS
Stop depreciating
Presentation & disclosure
SFP
SCI
Scope
ALL non-current assets & disposal groups
Must meet criteria before NonCA moved to CurAs
if NCAHFS part of CGU >>> group measured IFRS 5
Out of scope
DT Asset
IAS 19
IFRS 9
IAS 40 FV model
Recognition
(para 6) Asset classifed as NCAHFS >> CA will be recovered through sale and not continued use
Excl abandoment
When to classify?
para 6 - CA recoverred through sale
para 7 >> Ready for immediate sale & Sale highly probably ( requirements in para 8)
Initially >> para 18
CA of Assets before classification (old IFRS)
Subsequent >> para 19
CA's not in scope of IFRS 5 measured with other IFRS before determine FLCTS
Measurement
measure CA's before date classified
Measure CA according to IFRS 5 (lower of CA and FVLCTS)
Journal
**DR NCAHFS
CR Asset transferd (PPE, IAS 40)**
Difference between Old CA and new CA = Impairment
Impairment
para 20 >>> Impairment of transfer not from subsequent measurement
Impairment reversal
reversal = gain that will increase FVLCTS
Must not be recognised through remeasurement of items not in the scope
PRINCIPLE
Reversal is limited to:
Impairment calculated in accordance with IFRS 5
Impairment calculated in accordance with IAS 36
IMPAIRMENT ON GOODWILL CANNOT BE REVERSED
Disposal groups
CA before classification
Lower of CA and FVLCTS
Impair
Allocate impairment to Goodwill
Allocate to NCAHFS in disposal group measured ito IFRS 5(leave the rest as is)
Deferred Tax Implications
Carrying Amount
depreciation Ceases (para 25)
Impairments recognised
Tax Base
SARS continues granting allowances
Recoupment if sold in future 27%
Calculation
Intention changes to sale (27% * 80%) >>> CGT!!!
Assets
L&B >>> Cost TB = zero
All allowances have been utilized
Impairment for capital assets >> 21.6%
Other assets impairment >>> 27% (recoupment)
Presentation
Disposal Group disclosed as 1 asset on SFP
Additional Considerations
Interest & other expenditure will continue
If business unit remains active, CA's will change >>> depreciate(show use of economic benefits)
Inventory, Trade Receivables balances will change UNLESS trading ceases the moment the asset is held for sale.
Derecognition
Principle: If asset classified as held for sale no longer meets criteria >> cease classification as NCAHFS