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Good Night,
In relation to IFRS 5, I have some questions:
1] I’m confused as to the meaning of “abandon” in IFRS 5.
2] NCA Held for Distribution to Owners- Does “Owners” refer to the shareholders of the entity? What is an example of a NCA Held for Distribution to Owners?
Thank you.
Hi,
If we abandon the asset then it is not being sold and therefore will not fall under IFRS 5 NCA-HFS.
The second one can relate to any item of PPE that is being distributed to the owners/shareholders. Don’t worry about this point too much as you will be unlikely to see much on it.
Thanks
Good Night,
One final question in relation to Q1, I’m confused as to which accounting standard will the abandoned asset therefore be accounted for under?
Thank you for you help! 🙂
Hi,
The asset will continue to be accounted for under IAS 16 and then once scrapped will e removed from the SFP and a loss likely to occur.
Thanks
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