Wiley International Trends in Financial Reporting under IFRS: Including Comparisons with US GAAP, Chinese GAAP, and Indian GAAP

CHAPTER 21

NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (IFRS 5)

1. OBJECTIVE

1.1 This Standard is relevant in case of noncurrent assets or groups of assets and liabilities (known as disposal groups) that are held for sale.

1.2 This Standard also applies to the presentation and disclosure of discontinued operations.

2. SYNOPSIS OF THE STANDARD

The provisions of this Standard, which specifies the accounting for noncurrent assets held for sale and the presentation and disclosure of discontinued operations, are summarized next.

2.1 Non-Current Assets Held for Sale

2.1.1 An entity should classify a “noncurrent asset” or “disposal group” under the category “held for sale” if its carrying amount will be realized primarily through a sale transaction as opposed through the continuing operations of the entity.

2.1.2 In order to be classified as held for sale, an asset or disposal group should be available for immediate sale in its present condition subject only to the terms that are usual and customary for sales of such assets (or disposal assets), and its sale must be highly probable.

2.1.3 To be considered highly probable, an entity has to establish that its management is committed to a plan to sell the asset (or disposal group) and that an active program to locate a buyer and complete the plan has been initiated.

2.1.4 The sale must be expected to qualify for recognition as a completed sale within one year from the date of classification.

2.1.5 Events or transactions ...