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IFRS 5

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › IFRS 5

  • This topic has 2 replies, 3 voices, and was last updated 7 years ago by P2-D2.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • September 19, 2017 at 7:09 am #407917
    royalringo
    Member
    • Topics: 24
    • Replies: 5
    • ☆

    Sir,
    I am very confused on the differences between “Held for Sale” and “Discontinued Operation”.

    In my understanding, “held for sale” is that the asset is still using while waiting to be sold. While “Discontinued Operation” is the asset had been ceased to used.

    But why “Held for Sale” is formed part of the “Discontinued Operation”? What are the similarities and differences between them?

    September 19, 2017 at 11:07 am #407944
    sa1pw
    Participant
    • Topics: 8
    • Replies: 81
    • ☆☆

    I think held for sale can be shown on face in p&l or disclosed in notes, while in balane sheet it will be shown in current assets as operations held for sale.

    While the discontinued operation is one which should be shown on face in p&l as discontinued operations. For balance sheet there will be nothing as operation will be sold and no asset and liabilities will be there relating to it, You also charge loss/gain on disposal in the profits/loss from discontinued operations.


    @tutor
    Please correct me if I’m wrong?

    September 20, 2017 at 9:00 pm #408131
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7171
    • ☆☆☆☆☆

    Hi,

    The best way to think of NCA-HFS or a disposal group HFS is that we’re looking at the position statement. This then shows us that the item is to be sold within the next 12 months and what it is valued at.

    If it has been classified as HFS then it can be a discontinued operation if it is a separate major line of business or geographical location. If it isn’t then it won’t be shown as a discontinued operation. So here we are now focusing on the performance statement.

    So, we can classify an item as HFS but it may not be disclosed as discontinued if it isn’t a separate line of business/geographical area, but in order to be discontinued it must have been classified as HFS or disposed, so we can’t have a discontinued operation without it either being held as HFS or sold. Therefore determine the position first and then consider if it also discontinued.

    Thanks

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