D3- IFRS 5 Non-current assets held for sale and discontinued operations

Question 1

1. IFRS 5 non-current assets held for sale and discontinued operations

Answer 1

held-for-sale classification
in general, the following conditions must be met for an asset (or “disposal group”) to be classified as held for sale:
1. management is committed to a plan to sell;
2. the asset is available for immediate sale;
3. an active programme to locate a buyer is intiated;
4. the sale is highly probable, within 12 months of classification as held for sale( subject to limited exceptions)
5. the asset is being actively marketed for sale at a sales price easonable in relation to its fair value;
6. actions required to complete the plan indicate that it is unlikely that plan will be significantly changed or withdrawn

Question 2

2. IFRS 5 non-current assets held for sale and discontinued operations

Answer 2

initial measurement
1. double entry:(NRVCV)
DR: NON-CURRENT ASSET HELD FOR SALE (CURRENT ASSET)(SFP)
CR:PPE (SFP)

Question 3

3. presentation

Answer 3

1. assets classified as held for sale, and the assets and liabilities included within a disposal group classified as held for sale, must be presented separately on the face of the SFP;
2. this will be at the lower of its carrying amount at the date that is reclassified as held for sale and fair value less costs to sell.

Question 4

4. subsequent mesurement

Answer 4

1. no depreciation or amortization

2. further impairment losses