Review: This course gives a very good overview and fairly comprehensive examples of IFRS and GAAP to IFRS differences. 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. Whether it is a discontinued operation as per IFRS – 5? Management has not changed the intention to sell the PPE after December 31, however, it does not seek for a buyer anymore actively. 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? If the Group has sold subsidiary company (the major seperate business line) in 2018, but has not prepared financial statements for previous years. Thanks for your reply. However, at the same time, if you are not going to sell the division, it is NOT classified as held for sale and not accounted for as such. (IFRS 5.32). For example, using a standard that fits within a “rule” but that clearly does not represent the principle behind the standard can be a downside o… Thanks Sylvia â You will earn CPE credits from this course. In that case (argueing that the subsidiary represents a major line of business), does the disclosure of discontinued operations apply? Test Bank for Intermediate Accounting, IFRS Edition 15 - 20. I would like to ask that if a company has a reportable segement (a division in opertion) and related PPE items (land, building and equipments) as per IAS 16 and during the year stop the operations and rent out the whole division to its subsidiary company. This program imparts knowledge of International Financial Reporting Standards you need to succeed in todayâs global business world. All other assets not excluded in the above list must be measured at lower of their carrying amount and fair value less costs to sell. You should classify a non-current asset as held for sale if its carrying amount will be recovered principally through a sale rather than continuing use. Following my previous question, in the case that an asset is idle, shall we still depreciate the asset’s carrying amount (after impairment posting) over its remaining useful life? None of the buyers indicated that the price is too high. Can you please explain in detail? The debit for a sales tax properly levied and paid on the purchase of machinery preferably would be a charge to a. the machinery account. â Once you pass the assessment at the end of each module, you will receive a printable certificate. Hello, Silvia your teaching materials including Video lecture regarding IFRS is so interesting. If there is an increase in the fair value less costs to sell, BUT there is no measurement model given (cost or revaluation method). Thank you! Donât forget to check our Best Audit Courses. and all liabilities of that division would represent a disposal group. Once you classify an asset or a disposal group as held for sale, then you should measure it under IFRS 5. You know that completing 40 Free Test Bank for Intermediate Accounting IFRS Edition 2nd Edition by Kieso which is one of ways to learn all chapter contents included in this textbook. -Joshua McIntyre. good question – IFRS 5 does not say anything about it and IAS 16 says that you reclassify the revaluation surplus in equity when you derecognize the asset. Related to the topic, I have a question relating to impairment reversal. I just want to ask you, if NCA hed for sale is not classified as held for sale, the financial statment should be restated? The question is whether you should classify a non-current asset as held for sale in the case when you plan to stop using it, or abandon it. and cont. We hope that you found a course that will help you meet your learning goals. IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations. you do account for it under IFRS 5 – the only exception is that you should discount the cost to sell to its present value. Do you deduct the vat inclusive or not After the sale of subsidiaries, the media segment of the Group remains, continued by that last subsidiary and its parent. Many thanks for all materials you’ve prepared on IFRS. When is proceed on disposal of Non-Current Assets stated as other Income? However, as for the reversal of impairment loss, I would recognize it in 2016. Op deze pagina vindt u IFRS-gerelateerde content zoals artikelen over IFRS-standaarden, de verschillenanalyses NL-GAAP/IFRS en door ons ontwikkelde tools. thank you for your comment. â The modules discuss real-life scenarios that demonstrate the application of the standards. Or the opposite situation. Hi Sofia, you need to look at what’s the primary factor defining the segment in this case – is it the nature of operations? Or in other words, should both NCA held for sale and discontinued operations go hand in hand? Easy for a student too. Dear Chintaka, First of all, the asset or disposal group must be available for immediate sale in its present conditions and the sale must be highly probable. I’m unsure. In line with IFRS 5, we are to present the assets and liabilities of subsidiary held for sale as one line. IFRS 5 Non-current Assets Held for Sale and Discontinued Operations By:- Yohannes Negatu(ACCA,DipIFR) 2. Thanks again. Well, it means that you will NOT apply “held-for-sale accounting”, i.e. A Group disposes of a subsidiary that does not represent a separate major line of business or geographical area of operations. The evidence is that the sale contract has been prepared and the price and everything were confirmed by the seller. I think you got it just partially right. Likewise, i want to sell a CGU which is not discontinued but running in loss, i hv to present its asset separately in SOFP as Classified as HFS, but do not give separate disclosure of its Profit/loss in PL? Keeping up with Change: Issues for the Finance Professional by the University of London identifies and explores challenges to the finance professional arising from the ever-changing business environment. I am sure there will be the right explanation . Hi Josh, although not explicitly said in the standard – yes, you in fact do need to present it separately. 1)Is this IFRS equally applicable for NGO’s FS repoeting? 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