IFRS 5 Paragraphs 6 and 7

IFRS 5 practice aid
Classification as held for sale (IFRS 5 paragraphs 6 and 7)

To be sold or abandoned Abandoned
Sold
Available for immediate sale in No

present condition?
Yes
Sale highly probable? Consider:
1. Management committed to No
plan to sell?
Yes
2. Active programme to locate No

buyer and complete the plan?
Acquired with a view to resale? No
Yes
3. Actively marketed at No Yes

reasonable price?
Yes
Highly probable that criteria 1 to 4 No
4. Significant changes to plan No met within 3 months of acquisition?
unlikely?
Yes
5. Completion expected within Yes

1 year? No
Yes
Delay due to third party No Conditions imposed by Unforeseen
(not a buyer) extending buyer or others after firm No circumstances and No
period to completion purchase commitment appropriate response by
(Note 1)? (Note 2)? seller (Note 3)?
Yes Yes Yes
Criteria met by balance sheet date?
No
Yes
Classify as held for sale and re-measure in Disclose as non-adjusting Do not re-classify as held
accordance with IFRS 5 (see measurement post balance sheet event for sale
flowchart)
Note 1 - Answer yes only if the actions necessary to respond to these conditions cannot be initiated until after a firm purchase
commitment is obtained and a firm purchase commitment is highly probable within one year.
Note 2 - Answer yes only if the entity has taken timely actions necessary to respond to the conditions and a favourable resolution of the
delaying factors is expected.
Note 3 - Answer yes only if the entity has taken action within the initial one year period to respond to the change in circumstances, the
non-current asset or disposal group is being actively marketed at a price that is reasonable given the change in circumstances, it is
available for immediate sale and that sale is highly probable.
IFRS 5 practice aid
Measurement (at time of classification)
(IFRS 5 paragraphs 15 to 25)
Decision to sell made prior to year No

end?
Yes
Measure all assets and liabilities in

accordance with applicable IFRS
before classification as held for sale
No Trigger event for No loss

Held for sale before year end?
review for impairment
Yes Impairment
1. Re-measure non-current assets Allocate in No further action

at lower of fair value less costs to accordance with required
sell and carrying amount IAS 36
2. Re-measure disposal group as a

whole to lower of fair value less
costs to sell and carrying amount
No No further action
Impairment loss?
required
Yes
Allocate to non-current assets in

the following order:
• Goodwill
• Other assets pro rata on basis
of carrying amount
IFRS 5 practice aid
Remeasurement (at subsequent balance sheet
date) (IFRS 5 paragraphs 19 to 24)
Review at subsequent balance
sheet date
Is classification as available for sale No Reclassify as held for use and re-
still appropriate? measure at lower of carrying amount
prior to classification as held for sale
Yes adjusted for depreciation or amortisation
and recoverable amount at date of
decision not to sell
Re-measure disposal group as a
whole to lower of fair value less
costs to sell and carrying amount
Fair value less costs to sell lower Yes Allocate loss to non-current assets in the
than current carrying amount? following order: goodwill; other assets
pro rata on basis of carrying amount
No
Fair value less costs to sell higher Reverse previous impairment loss up to
than current carrying amount but Yes current fair value less costs to sell to the
less than original carrying amount extent not writing back goodwill
prior to initial classification as held previously written off
for sale?
No
Fair value less costs to sell higher Reverse previous impairment loss up to
Yes the original carrying amount to the extent
than original carrying amount prior
to initial classification as held for not writing back goodwill previously
sale? written off
IFRS 5 Practice Aid
Discontinued Operations (IFRS 5 paragraphs 31 and 32)
No Do the operations being discontinued
form a component of an entity i.e.
single CGU or collection of CGUs?
Yes
Is the component a separate major line Yes

of business or geographical area of
operations? (note 1)
No
Is the component part of a single plan

Yes
to dispose of a separate major line of
business or geographical area of
operations? (note 2)
No
Is the component a subsidiary acquired Yes

exclusively with a view to resale?
No
Meets criteria of held Has the component already
No for sale? (see No been disposed of, closed,
separate flowchart) abandoned or terminated?
Yes Yes
Classify as
held for sale and re-
measure
(see measurement
flowchart)
Continuing operations Discontinued operations
Note 1 – If the component does not meet the criteria of held for sale in its entirety, consider whether it can be sub-divided into further
components, some of which may meet the criteria as part of a single plan to dispose of a separate major line of business or geographical
area of operations.
Note 2 – Some of the components within such a plan may meet the criteria in one year whilst others may meet the criteria in subsequent
years

IFRS 5 Paragraphs 6 and 7

Uploaded by

Copyright:

Available Formats

IFRS 5 Paragraphs 6 and 7

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

IFRS 5 Paragraphs 6 and 7

Uploaded by

Copyright:

Available Formats

IFRS 5 practice aid

Classification as held for sale (IFRS 5 paragraphs 6 and 7)

Available for immediate sale in No

Sale highly probable? Consider:

2. Active programme to locate No

3. Actively marketed at No Yes

5. Completion expected within Yes

Decision to sell made prior to year No

Measure all assets and liabilities in

No Trigger event for No loss

1. Re-measure non-current assets Allocate in No further action

2. Re-measure disposal group as a

Allocate to non-current assets in

Is the component a separate major line Yes

Is the component part of a single plan

Is the component a subsidiary acquired Yes

Continuing operations Discontinued operations

You might also like