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IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations specifies the accounting for assets held for sale and presentation and disclosure of discontinued operations.

Published March 2004. Effective 1 January 2005.

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*UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.

Synopsis

Assets or disposal groups classified as held for sale must be measured at the lower of carrying amount and fair value less costs to sell. Any resulting impairment loss is recognised in profit or loss. Once classified as held for sale, these assets are not depreciated and are disclosed separately on the face of the statement of financial position (balance sheet) within current assets.

Discontinued operations are those which have been disposed of or are held for sale. Their results are separately disclosed within the statement of comprehensive income (income statement) and their cash flows are separately disclosed within the statement of cash flows (cash flow statement).

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*Not EU endorsed as at 7 June 2017.Read more on EU Endorsement

The following interpretation refers to IFRS 5

UK reduced disclosures

UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.

Amendments to the standard

Where an entity applies FRS 101, it is preparing Companies Act accounts rather than IAS accounts. Therefore the following amendments must be made to IFRS 5 in order to achieve compliance with the Companies Act and related Regulations:

  1. Analysis of the results of discontinued operations must be shown in the statement of profit or loss and other comprehensive income in a column identified as relating to discontinued operations. A total column must also be presented.

Disclosure exemptions

FRS 101 paragraph 8(c) states that a qualifying entity is exempt from providing an analysis of the net cash flows relating to discontinued operations provided that equivalent disclosures are made in the consolidated financial statements of the group in which the entity is consolidated. The remaining disclosure requirements of IFRS 5 must still be applied.

IFRS 5 paragraph for which exemption is available: 33(c).

This page was last updated 7 June 2017