IFRS 5 NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
1 INTRODUCTION AND OVERVIEW1
IFRS 5 includes rules with respect to the sale or abandonment of non-current assets. The differentiation between current and non-current assets according to IFRS 5 corresponds to the differentiation in IAS l2 (IFRS 5.Appendix A and IAS 1.66).
Non-current assets are sold individually in the simplest situation.
However, it may also be the case that a disposal group is sold. A disposal group is a group of assets to be disposed of as a group in a single transaction. A disposal group also includes liabilities directly associated with those assets that will be transferred in the transaction. The group also includes goodwill acquired in a business combination if the group is a cash-generating unit (CGU) according to IAS 36 to which goodwill has been allocated, or if it is an operation within such a CGU (IFRS 5.Appendix A and IAS 36.80–36.87).
A component of an entity comprises operations and cash flows that can be clearly distinguished from the rest of the entity both operationally and for financial reporting purposes. In other words, a component of an entity will have been a CGU or a group of CGUs, while being held for use (IFRS 5.31).
A discontinued operation is a component of an entity that is held for sale or has been disposed of. Furthermore, the component of the entity must meet one of the following criteria (IFRS 5.32):