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    NCA Held For Sale Discontinued Operations

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    Dog Watcher
    The loss from discontinued operations that should be reported before income tax for 2018 is P17,000,000.

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    NCA Held For Sale Discontinued Operations

    Uploaded by

    Dog Watcher
    4K views15 pages
    The loss from discontinued operations that should be reported before income tax for 2018 is P17,000,000.

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    NCA Held for Sale Discontinued Operations

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    NCA Held for Sale Discontinued Operations

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    The loss from discontinued operations that should be reported before income tax for 2018 is P17,000,000.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    4K views15 pages

    NCA Held For Sale Discontinued Operations

    Uploaded by

    Dog Watcher
    The loss from discontinued operations that should be reported before income tax for 2018 is P17,000,000.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 15

    PFRS 5

    Non-current Assets Held for


    Sale and Discontinued
    Operations
    What is the purpose of PFRS 5?
    To specify the accounting trearment for assets held
    for sale
    To set presentation and disclosure of discontinued
    operations
    Assets Held for Sale
    Non-current assets or disposal groups
    shall be classified as held for sale
    when their carrying amount will be
    recovered through a sale rather than
    through a continuing use.
    Exceptions
    When you sell non-current
    assets in your primary
    business.
    Disposal Groups
    Somtimes, companies plan to
    sell or discontinue a group of
    assets and liabilities in a single
    transaction.
    How do we assess if an asset's carrying amount
    will be recovered through a sale?
    • The asset must be available for sale in its present
    condition
    • Sale must be highly probable
    Management is commited to a plan to sell
    Active program to locate the buyer initiated
    Asset is marketed at a reasonable price
    Sale should be completed within one year from the
    date of classification
    Assets/operations expected
    to be abandoned do not
    qualify as assets held for
    sale.
    Measurement
    Lower of carrying amount and fair
    value less costs to sell/distribute
    Do we depreciate non-current
    assets held for sale?
    What are Discontinued Operations?
    1.) A company eliminates a component of a
    business.
    2.) The company is not going to have any
    significant involvement going forward.
    ABC CORP.
    Presentation
    Statement of Comprehensive Cash Flows
    Income • Net cash flows attributable to
    • Single amount comprising of the operating, investing, and
     Post-tax P/L of financing activities of a
    discontinued operations discontinued operations
    Post-tax gain/loss on the • Can be presented in the notes
    measurement of FV - costs
    to sell or disposal
    • Analysis of the single amount
    in the notes or statement of CI
    Presentation
    Statement of Financial Position
    Present separately in the face of the statement of FP:
    • Assets classsified as held for sale
    • Assets and liabilities in the disposal group
     Analysis of the single amount in the notes or statement of CI
    On September 30, 2018, when the carrying amount of the net assets of
    a business segment was P 70,000,000, Young Company signed a legally
    binding contract to sell the business segment.

    The sale is expected to be completed by January 31, 2019 at a selling


    price of P 60,000,000.

    In addition, prior to January 31, 2019, the sale contract obliged Young
    Company to terminate the employment of certain employees of the
    business segment incurring an expected termination cost of P 2,000,000
    to be paid on June 30, 2019.

    The segment revenue and expenses for 2018 were P 40,000,000 and P
    45,000,000 respectively.

    Before income tax, what amount should be reported as loss from


    discontinued operation for 2018?
    Selling Price 60,000,000
    Carrying Amount 70,000,000
    Impairment loss 10,000,000

    Revenue 40,000,000
    Expenses (45,000,000)
    Impairment loss (10,000,000)
    Termination cost (02,000,000)
    Loss from discontinued (17,000,000)
    operation

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