Classification For an Asset / disposal group to be classified as held for sale, 3 criteria’s shall be fulfilled. An impairment loss is recorded for long-lived assets held-for-sale when the carrying amount of the asset exceeds its fair value less cost to sell. Is a subsidiary acquired exclusively with a view to resale. As part of the deal they also ended up buying FM104 in Dublin and Highland Radio in Donegal. There’s no need to identify the discontinued operations as a separate line item in the previous year. These disclosures may be presented either on the face of the statement of cash flows or in the notes to the financial statements. A glance at the statements will show that although there are significant disclosure savings (particularly in When presented in the statement of profit or loss and other comprehensive income, it shall be presented in a separate section identified as discontinued operations, which is separate from continuing operations. Non-current assets (or disposal groups) held for sale and discontinued operations. The disclosure requirements were also less extensive. They should not be offset or combined into a single line item. IFRS 5 Non-current Assets Held for Sale and Discontinued Operations specifies the accounting for assets held for sale and presentation and disclosure of discontinued operations. Articles, Clarence Street, Dun Laoghaire, Co. Dublin, Ireland To find out more, see our Cookies Policy One disclosure example is “These financial ... Indemnification asset The sale and purchase agreement contains an indemnification clause in which ... been recognised at a proportion of the cost of the original 70% interest held, amounting to $622,600 as at 31 December 2010 . IFRS 5 Non-current Assets held for Sale and Discontinued Operations Accounting summary 2017 - 04 1 Objective The objective of this IFRS is to specify the accounting for assets held for sale, and the presentation and disclosure of discontinued operations. Discontinued operations should also be shown as a separate line item on the statement of cash flows. Loans and borrowings 69 28. Examples 11-12 accompanying IFRS 5 illustrate presentation of assets and disposal groups held for sale. Capital management 68 27. The comparative figures for the previous financial period should be re-presented, so the disclosures relating to discontinued operations in the prior period relate to all discontinued operations up to the current period. Once classified as ‘held for sale’ the asset should be measured at the lower of its: The government insisted they sell FM104 and Highland Radio as soon as possible if the deal was to be allowed. Australian-specific paragraphs (which are not included in IFRS 5) are identified with the prefix “Aus”. Under IFRS 5 ‘An entity shall present and disclose information that enables users of the financial statements to evaluate the financial effects of discontinued operations and disposals of non-current assets (or disposal groups)’. Measurement of asset(s) held for sale 18 2.1 Fair value less costs to sell 18 2.2 Recognition of impairment losses 19 2.3 Reversals of previous impairment losses 20 3. Also, assets and liabilities that are part of a disposal group held for sale must be disclosed separately from other assets and liabilities in the statement of financial position. NOTE 15. Likewise, the presentation and disclosure of noncurrent assets and disposal groups held for sale - ... (for example, the discontinuance) or by announcing its main features to those affected by it. A discontinued operation is a component of an entity that has been disposed of, or classified as “held for sale”. NB. This part of IFRS 5 is concerned with separate disclosure of the results of operations deemed to be discontinued. An entity should disclose the following information in the notes of the financial statements in which an asset or disposal group has been sold or classified as “held for sale”: Although you re-present the discontinued operations performance figures in the previous statement of comprehensive income, you don’t do that in the statement of financial position. This site uses cookies. For a company, a discontinued operation could result from structural changes such as a shift in business models, sale of equipment, scrapping of product lines, and more. Terms & Conditions In particular, the Standard requires: (a) assets that meet the criteria to be classified as held for sale to be the post-tax gain or loss on disposal (based on the fair value minus costs to sell of the asset or disposal group). Your email address will not be published. Equity items. Represents a separate major line of business or geographical area of operations, Is part of a single co-ordinated plan to dispose of a separate major line of businesses or geographical area of operations, or. specifying that disclosure requirements in the Standard, except for those in paragraphs B10-B16 (on summarised financial information), apply to any interests that are classified as held for sale, held for ribution to owners or discounted operations in accordance with FRS 105 Non-current Assets Held for The amendments apply retrospectively. Required fields are marked *. There must be a single amount on the face of the statement of comprehensive income (or income statement) for the total of: This analysis may be contained in the notes or on the face of the statement of profit or loss and other comprehensive income. A business or nonprofit activity that, on acquisition, ... disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff). The standard was published in March 2004 and is effective from 1 January 2005. Processing Type of Assets Held for Sale. An example of the subsidiary acquired with a view to resale happened a few years ago when Communicorp, the owner of 98FM and Spin 1038, bought EMAP’s radio holdings in Ireland. Inherited from trigger. Similarly it is possible to have assets held for sale without discontinuing an operation. Your email address will not be published. Property, plant and equipment 53 21. Capital and reserves 65 26. Sometimes, they are identical, sometimes, assets held for sale is a subgroup of discontinued operations. They … the post-tax profit or loss for the period from the discontinued operations, and. This site uses Akismet to reduce spam. 1. Consolidation Units Held for Sale. 19. A company needs to follow strict accounting rules to disclose all crucial details regarding ceased operations. This will be allocated to the relevant category, whether operating, investing or financing in the statement of cash flows. Objective. The objective of IFRS 5 is to specify the accounting for assets held for sale, and the presentation and disclosure of discontinued operations. If you looked at the accounts of Communicorp, they would most likely show those two stations as discontinued operations for that year. Please click this for all the relevant disclosure in one place: Sample Disclosure Of Continuing And Discontinued Operations In One Place (27 January 2011) How an Available-for-Sale Security Works . NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS Objective 1 The objective of this Standard is to specify the accounting for assets held for sale, and the presentation and disclosure of discontinued operations. Non-current assets classified as held for sale must be disclosed separately from other assets in the statement of financial position. Disposal group held for sale 52 20. All balance sheet items with the following exceptions: Investment items. Also, assets and liabilities that ar… Intangible assets and goodwill 56 22. Sample Disclosure in Financial Statements, Sample Disclosure - Non-current Assets Held For Sale and Discontinued Operations (3 December 2008) « Learnaccounting’s Weblog, Sample Disclosure – Change of Financial Year End (25 November 2008), Books Of Original Entry In Accounting Pdf | Income Tax Accountant, More On Books of Original Entry – Cash Book, Accounting Entry Disposal Subsidiary | International Tax Accountant, Sample Disclosure – Note On Disposal Of Subsidiary (1 October 2009), Accounting Declaration Cash Dividend | Rates for CPA Services for SMB, Sample Disclosure – Dividend Declaration in Directors’ Report (18 August 2009), Qualified Accounting Report | Rates for CPA Services for SMB, Sample Disclosure – Auditors’ Report With Qualified Opinion (16 December 2010), Sample Disclosure In Financial Statements, Statement by Directors and Statutory Declaration, International Financial Reporting Standards, Sample Disclosure – Change Of Principal Activities (3 August 2011), Article On Capital Statement (2 August 2011), Sample Reports And Financial Statements (5 July 2011), Sample Statement Of Changes In Equity (20 May 2011), Sample Disclosure – Revenue Recognition Policy For Sale Of Goods (6 May 2011), critical judgement in applying accounting policies, significant event subsequent to balance sheet date. 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