Non Current Assets Held for sale Flashcards
What is IFRS 5?
IFRS 5 covers non current assets held for sale and discontinued operations.
How is a Non Current asset held for sale identified?
An asset held for sale is where the carrying amount will primarily be recovered from a sale.
It must meet the following criteria:
Must be available for immediate sale in present condition
Sale must be highly probable
Must be marketed at fair value with an active program to locate a buyer and a committed management plan to sell.
Sale must be expected within the next 12 months.
What is the value of an asset held for sale?
The lower of carrying amount and fair value less costs to sell.
If using the revaluation model an asset should be revalued before being reclassified.
Once reclassified the asset will be shown separately as a current asset.
Depreciation of the asset will stop from reclassification.
What are discontinued operations?
Discontinued operations are where a component of an entity is disposed of or held for sale.
This may include a subsidiary acquired with a view to resale.
How are discontinued operations shown on the financial statements?
Discontinued operations are disclosed on the SPL as a single figure containing:
Profit for the year from discontinued operations (Post Tax)
Gains or losses from disposal of assets.
Gain or Loss from reclassification of assets held for sale.
What else should be included in regard to discontinued operations?
An analysis of the figure given in the SPL should be included in the notes to the financial statements.
