IFRS 5 Assets held for sale and discontinued operations

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1
What is the objective of IFRS 5?
The objective of IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations is to establish principles for reporting information about discontinued
operations and non-current assets held for sale
2
When is a non-current asset classified as held for sale under IFRS 5?
"An entity shall classify a non-current asset as held for sale if its carrying
amount will be recovered principally through a sale transaction rather than
through continuing use."
3
What is the criteria an asset held for sale must meet in order to be treated as such?
 it is available for immediate sale in its present condition AND
 the sale is highly probable

A sale is highly probable if all of the following conditions are met:

 management are committed to a plan to sell the asset
 an active programme to locate a buyer has been initiated
 the asset is being actively marketed at a reasonable price
 the sale is expected to complete within one year from the date of
classification
 it is unlikely that the plan will change significantly or be withdrawn
4
What value should be used for a non-current asset classified as held for sale under IFRS 5?
The asset is measured at the lower of carrying amount and fair value less costs to sell.
Depreciation is not charged on the asset once it is classified as held for sale.
5
What happens if the fair value of a non-current asset held for sale decreases below its carrying amount?
An impairment loss is recognized in profit or loss.
6
What is the accounting treatment for discontinued operations under IFRS 5?
Has been disposed of or is classified as held for sale.
Represents a separate major line of business or geographical area.
Is part of a single coordinated plan to dispose of the entity.
7
How should the results of discontinued operations be presented in the financial statements?
Income Statement: The profit or loss from discontinued operations should be shown separately.

Balance Sheet: The assets and liabilities of discontinued operations should be separately classified as "held for sale".
8
What disclosures are required under IFRS 5 for discontinued operations?
📌 Profit or loss from discontinued operations for the period.
📌 Cash flows from operating, investing, and financing activities for discontinued operations.
📌 Details about the nature of the discontinued operation, including the reasons for the disposal.
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