Summary
Summary IFRS 5 non-current assets held for sale
- Course
- Institution
Summary of IFRS 5, all notes from lectures and examples
[Show more]
Seller
Follow
Talizamazoue
Reviews received
Content preview
IFRS 5- Non-current assets
held for sale and
discontinued
operations
,SCOPE:
- ALL non-current assets AND disposal groups
o Disposal groups must contain at least ONE non-current asset Sales transactions
INCLUDE an exchange of
DISPOSAL GROUP non-current assets if the
inventory PPE YES , disposal transaction cost has
debtors NOT a disposal inventory group commercial substance
creditors group debtors (Ito IAS 16)
creditors
(NO non-current assets included)
there is non-current assets therefore
disposal group
SCOPE: Measurement requirements
- ALL non current assets in terms of IFRS 5
- EXCEPT:
o Deferred tax assets and liabilities (IAS 12 measurement)
o Financial instruments (IFRS 9 measurement)
o Investment property (@ FV model) ( IAS 40 measurement )
o Employee benefits (IAS 19 measurement)
o Insurance contracts (IFRS 17 measurement )
,Statement of Financial Position on 30 November 2020
Notes 2020
R
Non-current assets 15 560 000
Land
Factory buildings (SFP amount BEFORE change was recognised
MINUS CA at the beginning of the year
Current assets 4 612 000
Non-current assets held for sale 3
(CA after loss with remeasurement at classification date PLUS
reversal of remeasurement loss )
Debtors 122 000
Inventory 215 000
Bank 275 000
Current liabilities
Liabilities associated with non-current assets held for sale 3 750 000
Creditors 107 000
Notes to the Financial Statements for the year ended 30 November 2020
3. Non-current assets held for sale
On 30 September 2020 (classification date), the directors decided to sell the factory building (with the mortgage loan
still outstanding with regards to the factory building). The expected final settlement is within 1 year of classification
date.
, NON-CURRENT ASSETS HELD FOR SALE
Classification
- There are 3 requirements
- As soon as a non-current asset meets ALL the criteria below ( the 3 requirements AND 5 requirements of highly
probable) then you can RECLASSIFY the non-current asset as held for sale
- Non current assets which meet the criteria as held for sale :
o Shown separately in SFP as CURRENT asset (reclassify from non-current to current assets)
o Measured @ LOWER of :
▪ Carrying amount
▪ FV less cost to sell
o Ceases depreciation (STOP depreciation from date of reclassification )
1) Non currents asset of which the Intention is from sale rather than to hold
carrying amounts are primarily
recovered from sale rather than
continued use
2) Non-current asset must: IE the entity has intention and ability to transfer asset to buyer in its present
a. Be available for immediate condition, IMMEDIATELY
sale subject only to terms • So basically, asset must be ready as it is (so if an asset needs to be
that are usual and customary repaired/maintenance first this will not meet this requirement)
for sales of such assets
b. AND sale must be highly 1) Appropriate level of management is committed to sales plan
probable: • For example, directors at formal meeting
(5 requirements must ALL be met for • It can’t be something that admin personnel discussed etc
highly probable)
2)Active program to find buyer and to complete the plan must have commenced
• For example a task team has been appointed and they are actively
working to locate a buyer
3)Asset must be actively marketed at price that is reasonable in comparison with
its current fair market value
• For example, asset is advertised at fair value, cant be at an excessive or
too low from market value
• The project team does market the assets at fair value and a buyer is likely
4)Sale must be completed within one year after date of classification as held for
sale (except for par.9)
• For example : the sale is expected to realize within 3 months based on
negotiations with possible buyer
THERE is an exception to this:
(2 requirements) ( if the time is longer than 1 year)
➢ The delay is caused by events outside of the entity’s control AND
➢ There is proof that the entity is committed to the sale
IF these 2 requirements are met then they can still be recognized as a non-current
asset held for sale!!!
5)Actions to complete the plan indicates that it is unlikely that significant changes
will be made to the plan or that the plan will be withdrawn
1. You must accept this if there is NO reason to
believe otherwise
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Talizamazoue. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.76. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
52355 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now