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    Notes On Accounting

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    Tyra Joyce Revadavia
    The document discusses the classification, measurement, presentation and disclosure requirements for non-current assets held for sale and discontinued operations under IFRS. For non-current assets to be classified as held for sale, management must be committed to a plan to sell and the sale must be highly probable within 12 months. Such assets are measured at the lower of carrying value or fair value less costs to sell. Discontinued operations represent a separate major line of business that will be eliminated from ongoing operations under a single coordinated plan, and must be presented separately in the income statement.

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    Notes On Accounting

    Uploaded by

    Tyra Joyce Revadavia
    44 views3 pages
    The document discusses the classification, measurement, presentation and disclosure requirements for non-current assets held for sale and discontinued operations under IFRS. For non-current assets to be classified as held for sale, management must be committed to a plan to sell and the sale must be highly probable within 12 months. Such assets are measured at the lower of carrying value or fair value less costs to sell. Discontinued operations represent a separate major line of business that will be eliminated from ongoing operations under a single coordinated plan, and must be presented separately in the income statement.

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    Notes on Accounting

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    The document discusses the classification, measurement, presentation and disclosure requirements for non-current assets held for sale and discontinued operations under IFRS. For non-current assets to be classified as held for sale, management must be committed to a plan to sell and the sale must be highly probable within 12 months. Such assets are measured at the lower of carrying value or fair value less costs to sell. Discontinued operations represent a separate major line of business that will be eliminated from ongoing operations under a single coordinated plan, and must be presented separately in the income statement.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    44 views3 pages

    Notes On Accounting

    Uploaded by

    Tyra Joyce Revadavia
    The document discusses the classification, measurement, presentation and disclosure requirements for non-current assets held for sale and discontinued operations under IFRS. For non-current assets to be classified as held for sale, management must be committed to a plan to sell and the sale must be highly probable within 12 months. Such assets are measured at the lower of carrying value or fair value less costs to sell. Discontinued operations represent a separate major line of business that will be eliminated from ongoing operations under a single coordinated plan, and must be presented separately in the income statement.

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    of 3

    NOTES ON NON­CURRENT ASSETS HELD FOR SALE (IFRS 8)

    I. Classification

     Requirements to be classified as NCA­HFS:

    a. Management is committed to a plan to sell.

    b. Asset is available for immediate sale.

    c. active programme in locating a buyer is initiated.

    d. The sale is highly probable, within 12 months after classification.

    e. The Asset is being actively marketed for sale at a reasonable sales 
    price related to its fair value.

    f. Actions indicating that the plan to sell is unlikely to significantly 
    change or to be withdrawn.

    Note:

    The assets classified as held for sale need to be disposed of through 
    sale. Hence, expected discontinuing of operations are not valid to qualify as 
    “held­for­sale” asset.

    II. Measurement

     At the time of classification as held for sale:

    Measured according to the standard applied to the asset.

     After classification as held for sale:

    Measured at:

    CV vs. FVLCTS, whichever is LOWER.

    ­ difference is recognized in profit or loss as IMPAIRMENT LOSS (IAS
    36).

    ­ In case of Revaluation Method, impairment is treated as decrease 
    in revaluation surplus account only to the extent of the amount in 
    revaluation surplus account.

     Assets @FV prior to initial classification as held for sale:

    ­ Cost to sell is charged to profit or loss.
     Subsequent increases in FV:

    ­ Recognized in profit or loss only to the extent of the cumulative
    impairment loss recognized.

     Depreciation:

    ­ NCA­HFS shall not be depreciated.

    III. Presentation & Disclosure

     NCA­HFS must be presented separately as a line item on the face of the 
    balance sheet.

     NCA­HFS, including its corresponding liabilities must be disclosed 
    separately.

     Additional disclosures including description of the nature of assets held 
    for sale and the circumstances surrounding the sale.

    NOTES ON DISCONTINUED OPERATIONS (IFRS 5)

    I. Classification

     Requirements of a component of an entity to be classified as 
    Discontinued Operation:

    i. It represents a separate major line of business or geographical
    area of operations.

    ii. Part of a single coordinated plan to dispose of a separate 
    major line of business or geographical area of operations.

    iii. A subsidiary acquired exclusively with a view to resale and the
    disposal involves loss of control over the subsidiary.

    II. Measurement

    Profit/Loss on Discontinued Operations P  xx

    Related Income Tax Expense (Due to DTA/DTL) (xx)

    Gain (Loss) on Remeasurement  xx 

    Post Tax Profit/Loss on Discontinued Operations  xx

    Termination Costs (xx)
    Discontinued Operations P  xx 

    III. Presentation & Disclosure

     Discontinued Operations must be presented as a single amount on the 
    face of the income statement.

     Detailed disclosure is required either in the Notes to FS or on the 
    face of I/S as a section distinct from continuing operations.

     Cash flows attributable to discontinued operations must also be 
    presented separately on the face of the cash flow statement or 
    disclosed in the Notes to FS.

     Retroactive classification is prohibited.

     Adjustments made in the current period as a discontinued operation 
    in prior periods must be disclosed separately.

     If a component ceases to be classified as held for sale, results 
    thereof must be reclassified and included in the income from 
    continuing operations for all period presented.

    Note:

    Subsidiaries Held for Disposal:

    ­ If the sale is highly probable to be completed within 12 months, the
    subsidiary shall be classified as held for sale.

    ­ If the entity retains NCI even after the sale, the subsidiary shall 
    be classified as held for sale

    ­ FS consolidation still required until subsidiary is actually 
    disposed of, as per IAS 27.

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