Non-current assets held for sale & Discontinued operations Flashcards
1
Q
Non-current asset HFS when conditions met:
A
1) must be available for immediate sale in present condition
2) terms of sale must be usual and customary
3) sale must be highly probable (management committed, initiated active program to try and find buyer, actively marketed for sale, sale expected to be completed in 1 year, unlikely significant changes to sale)
2
Q
Measurement (non-current HFS)
A
- measure at lower of CV or FV - costs to sell
- any losses recognized in income
- depreciation stops once HFS
- if FV - costs to sell subsequently increases, write up to extent of previous impairment loss, gain recognized in income
3
Q
Presentation (non-current HFS)
A
- presented under current assets, but presented separate as HFS
4
Q
Discontinued operations classification
A
- a component pf an entity that either has been disposed of or classified as HFS and meets one of the following:
1) represents a separate major line of business or geographical area
2) part of a single co-ordinated plan to dispose of a single major line of business/geographical area
3) subsidiary acquired exclusive to sell
5
Q
Measurement (discontinued operations)
A
- measure at lower of CV or FV - costs to sell
- any losses recognized in income
- depreciation stops once HFS
- if FV - costs to sell subsequently increases, write up to extent of previous impairment loss, gain recognized in income
6
Q
Presentation (discontinued operations)
A
- present separately on statement of comprehensive income: the post tax profit/loss from discontinued operations and post tax G/L related to re-measurement/disposal of discontinued operations
7
Q
ASPE difference
A
- HFS do not apply on distribution to owners
- impairment losses cannot be reversed (for when FV - costs to sell increases)
- HFS classified: either current or non current depending on nature OR current if sold in prior to completion of statements
