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Hi Mike…
Re: 2006 exam ques “KEFFLER CO” … year ending 31 mar 2006 (asking for matters to consider)An asset was sold at a loss in may 2005. The loss and Carrying Value is material to the FS. The answer states that loss should be disclosed separately as per IAS16 but it should not be captioned in any way so as to suggest it is not part of the normal operating activities.
Now, I am a bit confused …….Shouldn’t it have been ‘as per IFRS5’ ? Or can an asset be sold without being classified under IFRS5??
Thank you..Yes, if it is sold in the year, then IFRS 5 doesn’t come into it. If, at the end of the year, an asset has been classified as held for sale, then IFRS 5 applies. But if it’s gone, where does IFRS5 fit in? It’s gone!
Oh…… I thought it would have changed from IAS 16 to IFRS 5 ( like may be in the previous month) from when they started thinking about selling it………………….
So suppose the asset is sold in May……..The asset does not have to be changed from IAS 16 to IFRS 5 in April (Assuming they decided to sell in april)……….??
If the year end were 30 April and the decision were before April, and it satisfies all the criteria for IFRS5, then it’s an asset held for sale
If the year end were December, the decision to sell was in April, the sale took place in May, then it’s not AHFS at the previous year end (December) nor at next year end (again December) because it’s sold / gone!
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