This document summarizes IFRS 5, which specifies accounting for non-current assets held for sale and discontinued operations. It outlines the objective and scope of IFRS 5, and covers classification and measurement of assets held for sale, impairment losses, presentation of discontinued operations and assets held for sale, and additional disclosure requirements. Key points include classifying assets as held for sale if their carrying amount will be recovered through a sale, measuring assets held for sale at lower of carrying amount or fair value less costs to sell, and presenting profit/loss and cash flows of discontinued operations separately in financial statements.
This document summarizes IFRS 5, which specifies accounting for non-current assets held for sale and discontinued operations. It outlines the objective and scope of IFRS 5, and covers classification and measurement of assets held for sale, impairment losses, presentation of discontinued operations and assets held for sale, and additional disclosure requirements. Key points include classifying assets as held for sale if their carrying amount will be recovered through a sale, measuring assets held for sale at lower of carrying amount or fair value less costs to sell, and presenting profit/loss and cash flows of discontinued operations separately in financial statements.
This document summarizes IFRS 5, which specifies accounting for non-current assets held for sale and discontinued operations. It outlines the objective and scope of IFRS 5, and covers classification and measurement of assets held for sale, impairment losses, presentation of discontinued operations and assets held for sale, and additional disclosure requirements. Key points include classifying assets as held for sale if their carrying amount will be recovered through a sale, measuring assets held for sale at lower of carrying amount or fair value less costs to sell, and presenting profit/loss and cash flows of discontinued operations separately in financial statements.
This document summarizes IFRS 5, which specifies accounting for non-current assets held for sale and discontinued operations. It outlines the objective and scope of IFRS 5, and covers classification and measurement of assets held for sale, impairment losses, presentation of discontinued operations and assets held for sale, and additional disclosure requirements. Key points include classifying assets as held for sale if their carrying amount will be recovered through a sale, measuring assets held for sale at lower of carrying amount or fair value less costs to sell, and presenting profit/loss and cash flows of discontinued operations separately in financial statements.
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The key takeaways are that IFRS 5 specifies the accounting for assets held for sale and discontinued operations. It covers classification, measurement, presentation and disclosure requirements.
The objective of IFRS 5 is to specify the accounting for assets held for sale, and the presentation and disclosure of discontinued operations.
For an asset to be classified as held for sale, it must be available for immediate sale, a sale plan must be approved and an active program to locate a buyer must be initiated, and the sale must be highly probable within one year.
IFRS 5
Non-current Assets Held for Sale
and Discontinued Operations
By:- Yohannes Negatu(ACCA,DipIFR)
Overview OBJECTIVE SCOPE CLASSIFICATION OF NON-CURRENT ASSETS (OR DISPOSAL GROUPS) AS HELD FOR SALE OR AS HELD FOR DISTRIBUTION TO OWNERS MEASUREMENT OF NON-CURRENT ASSETS (OR DISPOSAL GROUPS) CLASSIFIED AS HELD FOR SALE Recognition of impairment losses PRESENTATION AND DISCLOSURE Presenting discontinued operations Presentation of a non-current asset or disposal group classified as held for sale Additional disclosures OBJECTIVE
The objective of this IFRS is to
specify the accounting for assets held for sale, and the presentation and disclosure of discontinued operations. SCOPE For all IFRS 5 issues CLASSIFICATION OF NON-CURRENT ASSETS (OR DISPOSAL GROUPS) AS HELD FOR SALE OR AS HELD FOR DISTRIBUTION TO OWNERS
An entity shall classify a non
current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. continued For this to be the case:- the asset (or disposal group) must be available for immediate sale in its present condition. The management must be committed to a plan to sell the asset (or disposal group), continued an active program to locate a buyer and complete the plan must have been initiated. the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value. continued the sale should be expected to qualify For recognition as a completed sale within one year from the date of classification, it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn continued If the criteria are met after the reporting period, an entity shall not classify a non current asset (or disposal group) as held for sale. However, when those criteria are met after the reporting period but before the authorization of the financial statements for issue, the entity shall disclose the MEASURMENT OF NON-CURRENT ASSETS (OR DISPOSAL GROUPS) CLASSIFIED AS HELD FOR SALE
An entity shall measure a non
current asset (or disposal group) classified as held for sale at the lower of its carrying amount and fair value less costs to sell. continued Non-current asset held for sale should not be depreciated, even if they are still being used. A non-current asset (or disposal group) that is no longer classified as held for sale is measured at a lower of its carrying amount and recoverable amount Recognition of impairment losses
An impairment loss should be
recognized where fair value less cost to sell is lower than carrying amount PRESENTATION AND DISCLOSURE
Presenting discontinued operations
We shall disclose: (a) a single amount in the statement of comprehensive income comprising the total of: (i) the post-tax profit or loss of discontinued operations and (ii) the post-tax gain or loss recognized on the measurement to fair value less costs to sell continued (b) an analysis of the single amount in into: (i) the revenue, expenses and pre-tax profit or loss of discontinued operations; (ii) the related income tax expense (iii) the gain or loss recognized on the measurement to fair value less costs to sell and (iv) the related income tax expense continued (c) thenet cash flows attributable to the operating, investing and financing activities of discontinued operations. (d) the amount of income from continuing operations and from discontinued operations attributable to owners of the parent. continued Presentation of a non-current asset or disposal group classified as held for sale We shall present a non-current asset classified as held for sale and the assets of a disposal group classified as held for sale separately from other assets in the statement of financial position. continued The liabilities of a disposal group classified as held for sale shall be presented separately from other liabilities in the statement of financial position. Those assets and liabilities shall not be offset and presented as a single amount. continued Additional disclosures (a) a description of the non-current asset (or disposal group); (b) a description of the facts and circumstances of the sale, or leading to the expected disposal, and the expected manner and timing of that disposal; continued (c) the gain or loss recognized (d) if applicable, the reportable segment in which the non-current asset (or disposal group) is presented in accordance with IFRS 8 Operating Segments. Thank You Questions and Discussion