Hi Sir, Thank you for answering my last question
I have some question related to the same PYQ March/June 2017 Q3 part (a) , The examiner answers:
"Where an item of PPE ceases to be rented and becomes held for sale, it should be transferred to inventory at its CA"
1. Why must transfer to inventory?is it because Carsoon is a motor vehicle retailer?
2.If HFS,is it should be carried at lower of CA and FVLSC?Why at its CA? is it because of valued at lower of cost and NRV of inventory?
"IFRS 5 Non-current asset HFS and Discontinued Operation does not apply when assets which are held for sale in the ordinary course of business are transferred to inventories"
3.is it the assets which are held for sale in the ordinary course of business actually refers to the inventory/assets the Co selling? if not, what is mean?
Thank you.
Ask the Tutor ACCA SBR
Carsoon Co
6y ago#1If Carsoon is a car dealer:
- inventory at the lower of CA and NRV (IAS 2)
If not a car dealer
- asset HFS in current assets at lower of CA and FVLSC (IFRS 5)
Bearing in mind that NRV is the same as FVLSC the only difference is the description of the asset and its positioning within current assets
Sign into reply to this topic.