IFRS 5 Flashcards

1
Q

What is IFRS 5?

A

Non-current Assets Held for Sale and Discontinued Operations.

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2
Q

Explain the criteria before an asset can be HELD FOR SALE?

A
  • available for immediate sale in its present condition

and

  • sale is highly probable.
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3
Q

What conditions need to be met if a sale is HIGHLY PROBABLE?

A

if ALL conditions are met:-

  • management have a plan to sell the asset
  • actively trying to locate a buyer
  • asset is being marketed at a reasonable price
  • sale to complete within one year from the date of classification
  • unlikely for the plan to change significantly or be withdrawn.
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4
Q

Explain the 2 implications to the financial statements when an asset has been classified as HELD FOR SALE?

A
  • measurement
  • classification
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5
Q

Are NCA depreciated if they are HELD FOR SALE?

A

NO - they are not depreciated if they are held for sale.

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6
Q

If the value of the asset HELD FOR SALE is less than carrying amount on SOFP what should happen?

A

It should be written down and the IMPAIRMENT charged against profit.

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7
Q

How do you classify an asset HELD FOR SALE?

A

This asset will be classified as a separate category of current asset.

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8
Q

Once an asset qualifies as HELD FOR SALE how should it be treated?

A
  • valued at the lower of carrying amount or fair value less costs.
  • The carrying amount must be written down to the lower
  • The impairment will be charged against profit for the year in the SOPL.
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