IFRS 5 consideration and things to remember – not a complete summary.
Scope
All non-current assets and disposal groups.
Disposal groups should include at least one non-current assets.
Measurement scope
All non – current assets except
o IAS 12, IAS 19, IFRS 9, IAS 40 IP @FV (common one).
Current assets is NOT measured ito IFRS 5.
Classification as “Held for Sale/distribution”
Look at requirements in text book
Period of sale can stretch beyond 1 year if delay is caused by events out of the
entities control and the entity stay committed to selling.
Present as current asset as soon as it meets the criteria.
Non - current assets / disposal groups purchased with the intention to sell,
classify only as held for sale if
o Will sell within 1 year and the sale is highly probable.
o If it meets the classification requirements after reporting date
Its a non – adjusting event ( IAS 10 )
If it meets the criteria before the FS authorised for issue – disclose.
Measurement:
Until immediately before classification as held for sale, measure the applicable
assets and liabilities in terms of their applicable IFRS
ON classification date and again on year end if not sold
o Measure the non – current assets / disposal groups classified as held for
sale at the lower of:
Carrying amount or
Fair value less cost to sell
o Remember – only assets within the measurement scope of IFRS 5.
Measurement: Disposal groups
At subsequent measurement, the assets and liabilities that do not fall within the
measurement scope of IFRS 5, must first be measured according to the
applicable IFRS before the CA of the disposal group is compared to the FV less
costs to sell of the disposal group.
No further depreciation or amortization if the non – current assets classified as
held for sale / that forms part of the disposal group.
Interest and other expenses attributable to liabilities of the disposal group
classified as held for sale will still be recognized.
Measurement – confusion between IAS 36 and IFRS 5
Scope
All non-current assets and disposal groups.
Disposal groups should include at least one non-current assets.
Measurement scope
All non – current assets except
o IAS 12, IAS 19, IFRS 9, IAS 40 IP @FV (common one).
Current assets is NOT measured ito IFRS 5.
Classification as “Held for Sale/distribution”
Look at requirements in text book
Period of sale can stretch beyond 1 year if delay is caused by events out of the
entities control and the entity stay committed to selling.
Present as current asset as soon as it meets the criteria.
Non - current assets / disposal groups purchased with the intention to sell,
classify only as held for sale if
o Will sell within 1 year and the sale is highly probable.
o If it meets the classification requirements after reporting date
Its a non – adjusting event ( IAS 10 )
If it meets the criteria before the FS authorised for issue – disclose.
Measurement:
Until immediately before classification as held for sale, measure the applicable
assets and liabilities in terms of their applicable IFRS
ON classification date and again on year end if not sold
o Measure the non – current assets / disposal groups classified as held for
sale at the lower of:
Carrying amount or
Fair value less cost to sell
o Remember – only assets within the measurement scope of IFRS 5.
Measurement: Disposal groups
At subsequent measurement, the assets and liabilities that do not fall within the
measurement scope of IFRS 5, must first be measured according to the
applicable IFRS before the CA of the disposal group is compared to the FV less
costs to sell of the disposal group.
No further depreciation or amortization if the non – current assets classified as
held for sale / that forms part of the disposal group.
Interest and other expenses attributable to liabilities of the disposal group
classified as held for sale will still be recognized.
Measurement – confusion between IAS 36 and IFRS 5
