Non-Current Assets Held for Sale and Discontinued Operations

Question 1

IFRS 5

Answer 1

A non-current asset held for sale is one that will have its carrying value recovered through a sale transaction rather than through continuing use
IFRS5.7
- must be available for immediate sale in its present condition
- terms must be usual and customary
- sale must be highly probable
IFRS 5.8

Question 2

Measurement

Answer 2

Lower of:
carrying value
FV less costs to sell
loss is recorded in NI
Assets dep. up to .point of reclassification (dep stops after being labeled HFS)
IF fv increases asset can be written up to impairment amt.
Gain recognized.

Question 3

Discontinued Operations

Answer 3

1. a discontinued operation is a component of an entity that meets one of the following criteria:

• It represents a separate major line of business or geographical area of operations.
• It is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations.
• It is a subsidiary acquired exclusively with a view to resale.

2. assets altogether: have already been sold or meet HFS criteria

Question 4

Measurement of Disc Operations

Answer 4

Lower of”carrying value
or
FV less costs to sell
..not focused on individual asset level..
On statement of Comprehensive income =
post tax p/l on disc op.
post tax g/l from measurement or disposal

Question 5

ASPE

Answer 5

does not apply to assets to be given to owners
impairment losses cant be reversed and ltd to losses incurred since classification
non currenr are put down under non current assets if longer tahn year, IFRS is all for current assets