INTERNATIONAL FINANCIAL

REPORTING STANDARD 5
NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED
OPERATIONS
 KEY DISCUSSION POINTS
• What are the objectives of this IFRS?
1

• Scope
2

• How to classify?
3

• Which measurement method to be used?

4

• How to present and disclose the information in Financial

5 Statements?
 OBJECTIVE

To specify the To set the presentation

accounting for and disclosure of

Asset held for sale Discontinued operations

 SCOPE
CLASSIFICATION AND PRESENTATION
REQUIREMENTS
Applies to all identifiable assets / disposal groups

MEASUREMENT REQUIREMENTS

Applies to all identifiable assets/disposal groups, except for:

– Deferred tax assets (IAS 12)
– Employee benefits (IAS 19 )
– Financial assets (IFRS 9)
– Investment property (IAS 40)
– Agriculture (IAS 41)
– Insurance contracts (IFRS 4)
 CLASSIFICATION
Asset held for sale
When carrying amount will be recovered --- through a sale transaction

 Available for sale in its present condition

 Sale is highly probable

Management committed to a plan to sell

Active program to locate a buyer

initiated

Asset is marketed at a reasonable price

Within one year

Continuation of Plan

Asset Held for Sale

Distributed to Owner
SALE EXPECTED IN OVER 1 YEAR
Continue to recognize under IFRS 5, if:

 Caused by events or circumstance beyond entity’s control

 Sufficient evidence that the entity remains committed to its plan

to sell the asset
MEASUREMENT

Asset held for sale

LOWER OF

Fair value less cost to

Carrying amount sell
MEASUREMENT
Before
After classification
classification

In line with applicable Lower of Carrying

Asset measurement IFRS Amount and Fair Value
less cost to sell

In line with Difference of CA –

applicable IFRS Fair Value less
cost to sell
Impairment In P&L or OCI Always in P&L
SUBSEQUENT MEASUREMENT

• No Depreciation

• Check the impairment of asset

at end of each reporting period

• No gain will be recognized

CHANGE TO A PLAN TO SALE
 Criteria no longer meet, removed from classification

LOWER OF

Recoverable amount Original carrying amount

before classification under
IFRS 5
DISPOSAL GROUP
 When entity tries the dispose of
a group of assets and liabilities.

 However, asset / operations

expected to abandon don’t
qualify
 DISCONTINUED OPERATION
Component of an entity, that:

 Has been disposed of, or

 Is classified as held for sale

 Represents a separate major line of

business or geographical area of
operations,

 Is part of a plan to dispose it of, or

 Subsidiary acquire to resale

When entity abandon any operation treated as discontinued operations.

PRESENTATION AND DISCLOSURE
STATEMENT OF Single amount comprising of:
COMPREHENSIVE
INCOME  The post-tax profit or loss of
discontinued operations

 The post tax gain or loss

recognized on the measurement
and disposal.

Analysis of the single amount in the

notes or the statement of
Comprehensive Income
PRESENTATION AND DISCLOSURE
STATEMENT OF Present separately on the face of
FINANCIAL POSITION statement of Financial Position

 Assets classified as held for sale

 Assets and liabilities in the

disposal group classified as held
for sale
THANK YOU