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IFRS 5-Non current asset held for sale

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › IFRS 5-Non current asset held for sale

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by Kim Smith.
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    Posts
  • December 3, 2021 at 1:04 pm #642394
    gayathree1234
    Member
    • Topics: 40
    • Replies: 1
    • ☆

    Hi sir,

    When classifying an asset as Held for sale, should the asset meet all the conditions in IFRS 5 or one of the condition should be met?

    Thank you 🙂

    December 3, 2021 at 1:35 pm #642400
    Kim Smith
    Keymaster
    • Topics: 100
    • Replies: 6789
    • ☆☆☆☆☆

    Short answer – ALL.

    Long answer:

    6 An entity shall classify a non-current asset (or disposal group) as held for
    sale if its carrying amount will be recovered principally through a sale
    transaction rather than through continuing use.
    7 For this to be the case, the asset (or disposal group) must be:
    – available for immediate sale in its present condition subject only to terms that are usual and
    customary for sales of such assets (or disposal groups)
    AND
    – its sale must be highly probable.
    8 For the sale to be highly probable:
    – the appropriate level of management must be committed to a plan to sell the asset (or disposal group)
    AND
    – an active programme to locate a buyer and complete the plan must have been initiated.
    FURTHER, the asset (or disposal group) must be actively marketed for sale at a
    price that is reasonable in relation to its current fair value.
    IN ADDITION, the sale should be expected to qualify for recognition as a completed sale within one year from the date of classification …

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