(Summary) Ind AS 105
Non-current Assets Held for Sale and
Is to specify the accounting for assets held for sale, and the presentation and disclosure of discontinued operations.
Classification and presentation requirements apply to all recognized non-current assets and to all disposal groups.
Measurement requirements apply to all recognised non-current assets and disposal groups, except for those assets listed in para 5.
- Disposal Group
- Discontinued Operations
- Cash Generating Unit
- Value in use
A component of an entity that either has been disposed of or is classified as held for sale and:
- Represents a separate major line of business or geographical area of operations,
- Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations or
- Is a subsidiary acquired exclusively with a view to resale.
A NCA should not be classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use.
- Asset must be available for immediate sale
- The sale must be highly probable i.e.
- Management must be committed to sell the asset
- There must be active programme to identify buyer
- The asset must be actively marketed for sale
- Sale price to be reasonable compared to its current FV
- Sale expected to occur within 1 year from date of classification
- Changes to this plan should be unlikely
- Probability of shareholders’ approval (if required in the jurisdiction) should be considered.
- NCA or disposal group classified as held for sale (or held for distribution to owners) to be measured at the lower of its carrying amount and fair value less costs to sell (or costs to distribute).
- Newly acquired asset meets the criteria to be classified as held for sale, on initial recognition to be measured at the lower of its carrying amount had it not been so classified (for example, cost) and fair value less costs to sell.
- Asset acquired as part of a business combination, to be measured at fair value less costs to sell.
- Recognise an impairment loss for any initial or subsequent write-down of the asset to FV less costs to sell.
- A NCA should not be depreciated (or amortised) while it is classified as held for sale or while it is part of a disposal group. Interest and other expenses to be recognised.
If an asset has been classified as held for sale, but the above criteria are no longer met, the asset (or disposal group) should be ceased to be classified as held for sale.
- Present and disclose information that enables users of the FS to evaluate the financial effects of discontinued operations and disposals of non-current assets (or disposal groups).
- Present a non-current asset classified as held for sale and the assets of a disposal group classified as held for sale separately from other assets in the BS. Same is the case for liabilities of a disposal group classified as held for sale.
- Description of the non-current asset or disposal group
- Description of facts and circumstances of the sale (disposal) and the expected timing
- Impairment losses and reversals, if any, and where in the statement of comprehensive income they are recognised
- If applicable, the reportable segment in which the non-current asset (or disposal group) is presented in accordance with Ind AS 108.