Ch. 17 - Non-Current Assets Held for Sale and Discontinued Operations

Question 1

Held for Sale - Criteria

Answer 1

1. asset must be available for immediate sale
2. terms of the sale must be ordinary
3. Management has a plan to sell the asset
4. asset is actively marketed
5. unlikely that the plan to sell will change
6. actively looking for a buyer

Question 2

Measurement of assets HFS

Answer 2

measured at the lower of its carrying value and fair value less costs to sell, with losses to net income

Question 3

Depreciation of assets HFS

Answer 3

depreciated to the point of reclassification

Question 4

FS Presentation of Assets HFS

Answer 4

shown as a current asset on BS

Question 5

Discontinued Operation Criteria

Answer 5

1. has been either disposed of or is HFS, and
2. any of:
   a) represents a separate major line of business or geographic area of operations, or
   b) is part of a co-ordinated plan to dispose of a separate major line of business or geographical area, or
   c) it is a subsidiary acquired exclusively with a view to resale

Question 6

Measurement of discontinued operations

Answer 6

measured at the lower of:
1. carrying value, and
2. fair value less costs to sell
losses are recorded to net income

Question 7

Discontinued Operations - FS Presentation

• Balance sheet
• Income Statement

Answer 7

Balance Sheet
- non-current assets are shown separately from others
- if HFS, then shown as current asset
- liabilities are shown separately from other liabilities
Income statement
- additional line item post-tax profit/loss from disco ops and remeasurement

Question 8

ASPE - presentation of non-current assets HFS

Answer 8

• if not sold before FS are prepared, shown as long-term

Question 9

Non-Current Assets Held for Sale and Discontinued Operations - IFRS #

Answer 9

5

Question 10

Disposal of Long-Lived Assets and Discontinued Operations - ASPE #

Answer 10

3475