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Hi,
I am having trouble in Dec 14 Q1 regarding ifrs 5. First of all, I don’t understand why they aren’t selling the asset on $15.6m and why aren’t they recognizing gain of $.5m? why are they recognizing receivable of $15.3m? why are they minusing cost to sell from $15.6m? i know that when you sell an asset, you realise it on fv-cost to sell after constantly revaluing and the last that we took out is $15.1m. i don’t understand the logic of recognizing a receivable of $15.3m. Also, i am having issues regarding why are the assets held for sale/sold not seperately disclosed on the financial statement.Hi,
When the asset is disposed of for $15.6 million they then incur the selling costs of $0.3 million, so the net proceeds are $15.3 million. We then compare this to the $15.1 million value of the asset in our accounts to get the $0.2 million profit.
The $15.3 million is recognised as a receivable as the cash has not been received at the year-end. It isn’t received until December 2014.
There is no disclosure of the asset in the financial statements because it has been sold at the year-end and we can’t recognise something that is no longer our asset.
Hope this helps.
Thanks
That was helpful but it still confuses me. Wasn’t the cost to sell given to find out fv-cost to sell of the asset? Because that’s how it’s usually done. When we sell, we usually find profit using Disposal proceed minus Carrying amount but since the asset is not on carrying amount, why don’t we just minus fv-cost to sell which is $15.1 from the disposal proceeds? P
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