You recognize the impairment loss first. Hi Josh, although not explicitly said in the standard – yes, you in fact do need to present it separately. Due to COVID – in July we announced the cancellation of all titles effective in October. I have a question, when there is a discontinued operation recognized (NOT held for sale) we report this division separately, and we depreciate all assets as before or we stop depreciating as in the case of assets held for sale? if consultancy fees and professional fees relate directly to the sale of your asset, then yes, these should be taken into account when estimating asset’s FV less cost to sell. Keep it up . The magazine division comprises a number of subdivisions. 2) How do we treat the other expenses incurred but not directly related to the cost to sell. I recommend looking at the Example 12 of Implementation Guidance related to IFRS 5 published by IASB. For E.g. Learn vocabulary, terms, and more with flashcards, games, and other study tools. They haven’t made the sale as yet. 2)In case the management didnt classify asset group for sale in prior financial year,but slod a group of asset on following year.will this issue be treated as a departure from IFRS 5? IFRS, voor International Financial Reporting Standards, is een set van afspraken over hoe het jaarverslag van een verslagplichtige organisatie er uit dient te zien.Voor allerlei categorieën van zaken is vastgelegd hoe / wanneer ze in een jaarverslag opgenomen dienen te worden. In BBP, eg 1. IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations. Test Bank for Intermediate Accounting: IFRS Edition, 2e. Explain double-entry rules. I have a subsidiary which we intend to sale hence we classified it as asset held for sale. S. Thanks for this wonderful article.It really made my day. I am battling to distinguish whether or not IFRS 5 applies or not. De oudere IAS-standaarden zijn niet komen te vervallen maar zijn uitgebreid en verder uitgewerkt. Sometimes, they are identical, sometimes, assets held for sale is a subgroup of discontinued operations. Please will you help me? Assets arising from employee benefits (IAS 19 Employee Benefits). So these were the 5 Best IFRS Courses, Classes, Tutorials, Training and Certifications program available online. It means that if you derecognized your assets in their carrying amounts on disposal without revaluation to fair value less cost to sell, it’s OK, but you need to analyze total gain/loss on the disposal and calculate the amount attributable to remeasurement to fair value less cost to sell, and amount representing the gain/loss on the disposal. I understand your confusion. Putting some numbers to this: Hi Joel, Hello, may I kindly recommend looking to the BPP book solutions? Hi Serena, Outline the accounting treatment for the group assets in terms of IFRS 5 on 30/06/2018, if an assets is sold on going concern basis eg running business . in the statement of comprehensive income, you should dislose one single amount that comprises of: 036: Contract asset vs. account receivable, It specifies the accounting treatment for, It sets the presentation and disclosure requirements for. is it included under IFRS 5 or not. 2. S. We have recently sold a part of business (several retail properties out of larger group) and we have determined it is discontinued operations as it is a strategic shift. a company bought demolished factory (land, buildings, equipment), with the intention to reorganize the business and start the production again. During the middle of the following year, we have not completed the sale yet. The company is in a process of selling its subsidiary, a factory (which is a company as well). It is completely separated from the business the company is usually in. The standard IFRS 5 lists some measurement exceptions and you can read about them in the later paragraphs, but you still need to present and disclose the information about these assets under IFRS 5. Dear Ashvin, please, if you do not have the fair value for an assets classified as held for sale, can you use the carrying amount? Thank you. Hi Silvia, I want to thank you so much for your website and explanation to IFRS, it has demystified financial reporting for me. First 9 months were consolidated and last 3 months reported under IFRS 5 as discontinued. The chart of accounts is a special ledger used in accounting systems. Would ROU recognized on leases be required to be accounted for under IFRS 5 in subsidiary A’s book? Hope it’s clearer S. Thank you Silvia for your time writing this comprehensive answer. In line with IFRS 5, we are to present the assets and liabilities of subsidiary held for sale as one line. S. But IAs 40 is an exception as you mentioned above? Is this mandatory in case of discontinued operations? Or in other words, should both NCA held for sale and discontinued operations go hand in hand? Thanks in advance. S. Following Edmundo Gomez s question, in his case, shall we cease depreciations after booking impairments? We assume the FV less costs to sell is lower than the carrying values. Required or all the adjustments should be done in the current year. Thanks Sylvia I think you got it just partially right. Thanks in advance. There were also several costs associated with disposal that are not “costs to sell” i.e. NEW: Online Workshops – US GAAP, IFRS and other. expenses to sell (charged to P&L in year occurred) 10. In that case (argueing that the subsidiary represents a major line of business), does the disclosure of discontinued operations apply? Test Bank for Financial Accounting: IFRS Edition, 3e 2 - 4. For discontinued operation – you do disclose it separately in both P/L and balance sheet. In this case, these sales represent one of primary activities and the related assets are inventories in fact. If a disposal group has been disclosed as held for sale, does it impact going concern considerations? During 2016 negotiations with buyer took place. S. If an operation is discontinued, can you please help me understand how the comparative figures should appear on face of statement of financial position ? A quick one, if a disposal group is held for sale in year 2017 and assets and liabilities presented as a separate line in the financial position, what happen to comparative year 2016, are we going to retrospectively classify in 2016 too? It specifies the accounting treatment for assets (or disposal groups) held for sale, and 2. Easy for a student too. I know that there are two separate components: 1. Oh and one more question: according to your guidance, the presentation of result from discontinued operations is not included as such in the income statement (but in the comprehensive income staement). My question is how about the components of equity? Thanks again. Dear Hesham, Identify steps in the accounting cycle. In 2016 they did not plan to sell that subsidiary. -30/06/2018 3 480 000 The evidence is that the sale contract has been prepared and the price and everything were confirmed by the seller. no “exceptionals line”). Hi I would like how to account the asset held for sale if the sale is not yet completed during the following year. By using our website, you agree to the use of our cookies. Regards, But, it also means, that you WILL need to assess the criteria for presenting the abandoned asset or operation as discontinued operation. IFRS seems to speak about the comprehensive income statement only. Can you please explain in detail? CHAPTER 5 STATEMENT OF FINANCIAL POSITION AND STATEMENT OF CASH FLOWS CHAPTER LEARNING OBJECTIVES 1. 55+ Experts have compiled this list of Best Five IFRS Courses, Classes, Tutorials, Training, and Certifications program available online for 2020. These illustrative IFRS financial statements are intended to be used as a source of general technical reference, as they show suggested disclosures together with their sources. Therefore, you need to test assets for any impairment and at the same time, you need to present them separately from continuing operations in your financial statements (well, if a company plans to close one part of a business). Do we present it as one line as well for a subsidiary held for sale? I think that the company just generated expenses. – Top universities in the world offer IFRS courses on Coursera. IFRS 5 focuses on two main areas: 1. The company abandon the operation before the start of business and end up in paying compensation for the landlord from whom the building is to be leased. – for assets held for sale, you need to apply special accounting policy as defined in IFRS 5 (see above), and Now when we prepare Statement of financial position for continuing operation the comparative period 2015 should be $20,000 less 7,000 = $17,000 ? The reason is that by 31 December 2016, you have already got the sufficient evidence that the fair value of a hotel is much higher than its carrying amount. Yes, it’s a discontinued operation, but there are also assets or disposal groups held for sale too. Dear Siliva, thank you so much for the information provided on the website, it’s very useful. Under IFRS 5, a non-current asset, or a disposal group, is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather through continuing use (IFRS 5.6), which will be the case if the following conditions are met (IFRS 5.7):. The post tax gain or loss recognized on the measurement to fair value less costs to sell a or on the disposal of assets or disposal groups. – The modules include worked examples to illustrate aspects of the standards in action. Liabilities related to plant-1/7/2017 4 650 000 When you stop some operation, maybe you will have some assets held for sale in there. your contribution is remarkable and unforgettable is only GOD will reward you for that, i will be happy if you can help me with CD lecture. Like to discuss the difference between the assets held for sale requirements from Oct 1 titles in. 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