Prior years are not adjusted to present the asset group as held-for-sale (distribution). Presentation and disclosureįrom the date an asset group is classified as held-for-sale (distribution), its assets and liabilities are classified as current and presented separately from other assets and other liabilities on the balance sheet. Further, property, plant, equipment and intangible assets in the asset group are no longer depreciated or amortized. Costs to sell (distribute) are incremental costs directly attributable to the transaction, excluding finance costs and income tax expense. This means that expected losses are generally recognized before the transaction closes, while gains are generally recognized at closing. Measurement at lower of carrying amount and fair value less cost to sell (distribute)Īn asset group classified as held-for-sale (distribution) is measured at the lower of its carrying amount and fair value less costs to sell (distribute). Once classified as held-for-sale (distribution), the asset group is subject to specific measurement, presentation, and disclosure requirements. in a spin off) are assessed for held-for-distribution classification.Īn asset group is classified as held-for-sale (distribution) if it meets the following criteria. Similarly, asset groups to be distributed to the company’s owners acting in their capacity as owners (e.g. Examples of asset groups include a plant, a subsidiary, an operating segment or a cash generating unit. When a company decides to dispose of a noncurrent asset or disposal group 2 (referred to as asset group) through a sale transaction rather than through continuing use, the asset group is assessed for held-for-sale classification until sold. IFRS 5 1 requirements for asset groups held-for-sale (distribution) Classification as held-for-sale (distribution) These requirements are largely aligned, but differences exist. For example, when certain criteria are met, both IFRS Accounting Standards and US GAAP require that (1) assets and liabilities held-for-sale be presented separately on the balance sheet and (2) results and cash flows of discontinued operations be presented separately from those of continuing operations. From the IFRS Institute – September 7, 2023Įven before a company disposes of a group of assets or discontinues a major line of business or a geography, the financial statements may need to reflect the possible effects of the planned transaction.
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