Chapter 10 - Non-current assets held for sale IFRS 5

Question 1

What is the objective of IFRS 5?

Answer 1

To establish principles for reporting info about discontinued operations and non-current assets for sale

Question 2

What is the criteria for an asset to be considered held for sale?

Answer 2

• Available for immediate sale in current condition
• Sale is highly probable

Question 3

What conditions mean a sale is highly probable?

Answer 3

• management committed to a sale plan
• Active programme to locate a buyer
• Actively marketed at a reasonable price
• Unlikely plan will change

Question 3

When is a non-current asset classified as held for sale?

Answer 3

If its carrying amount will be recovered principally through a sale transaction rather than continuing use

Question 4

How much of the sale criteria needs to be met?

Answer 4

All of it

Question 5

What 2 implications does classifying an item as held for sale have?

Answer 5

• Measurement
• Classification

Question 6

Are non-current assets held for sale depreciated?

Answer 6

No

Question 7

How should non-current assets held for sale be valued?

Answer 7

Lower of:
- Carrying amount
- (Fair value - costs of disposal)

Question 8

Where do assets held for sale appear in the financial statements?

Answer 8

On the SFP

Separately below current assets