NCAHFS

Question 1

What is the presentation of NCAHFS?

Answer 1

Current Asset

Question 2

Conditions for sale to be highly probable

Answer 2

• Committed yung management to sell the asset/disposal group
• Active program to locate a buyer + complete the plan must have been initiated
• Reasonable yung sale price in relation to the fair value
• Expected to be a completed sale (within 1 year of reclassification)
• Unlikely that the plan will be significantly changed or withdrawn

Question 3

How is income from discontinued operation recorded in the income statement?

Answer 3

• As a single line item
• post tax
• after continued operations

Question 4

Does NCAHFS depreciate?

Answer 4

No, because it is considered a current asset already.

Question 5

What is the initial measurement of NCAHFS?

Answer 5

CA or FVLCTS
(whichever is lower)

exclusive of finance cost and income tax expense

Question 6

What is the subsequent measurement of NCAHFS?

Answer 6

CA or FVLCTS
(whichever is lower)

exclusive of finance cost and income tax expense

Question 7

It is a group of assets to be disposed of in a SINGLE TRANSACTION (and the liabs directly associated will be transferred)

Answer 7

Disposal Group

Question 8

It is an NCA or disposal group that is held for sale

Answer 8

NCAHFS

Question 9

What are the two conditions for an asset to be classified as NCAHFS

Answer 9

• available for immediate sale yung NCAHFS in its present condition
• sale must be highly probable

Question 10

Are finance costs and income tax expense included in the measurement of NCAHFS?

Answer 10

No. These are not included in costs to sell.

Question 11

What happens if CA > FVLCTS?

Answer 11

There is an impairment loss.

Question 12

What do you do if an impairment loss arises in a disposal group?

Answer 12

1st Step: Allocate to goodwill
2nd Step: Allocate the remaining amount prorata to the CA of each NCAHFS.

Question 13

What will happen if you have a subsequent increase in FVLCTS?

Answer 13

There will be a gain but only to the extent of impairment loss.

Essentially, only reversal of IL can happen.

Question 14

How could you say that there is a gain on disposal of NCAHFS?

Answer 14

CA < SP = gain

Carrying amount is the latest measurement.

Question 16

How could you say that there is a loss on disposal of NCAHFS?

Answer 16

CA > SP = loss

Carrying amount is the latest measurement.

Question 17

If an asset following the revaluation model is turned into a NCAHFS, what are the steps in measurement?

Answer 17

1. Revalue at the most recent Fair Value. (FV - CA = Revaluation Surplus in OCI)
2. Reclassify as NCAHFS (CTS is put to P/L and is treated as IL)
3. Subsequent measurement is at lower between CA and FVLCTS
4. Disposal of NCAHFS

Question 18

Can abandoned NCA be considered as NCAHFS?

Answer 18

No

Question 19

If an NCAHFS is reclassified back into NCA, how do you measure this?

Answer 19

Lower between CA as if never naging NCAHFS and Recoverable Amount.

Recoverable Amount = Higher between FVLCTS and VIU

Question 20

When is there a gain/loss on reversal of NCAHFS?

Answer 20

Gain: If the new carrying amount of NCA > old carrying amount (NCAHFS)
Loss: New carrying amount < Old Carrying Amount

Note: in the context of reclassification.

Question 21

How do you solve for income from discontinued operations?

Answer 21

Sales
Less: COGS
—————–
GP
Less: Expenses
Less: Termination Costs
Less: Impairment Loss
——————–
Income before tax
Less: Income Tax
———————
Income from discontinued operations

Question 22

Where is the solution for discontinued operations presented?

Answer 22

Notes to FS