IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
- Published in the Official Journal
- Ioana Kiss
IFRS 5 arises from the IASB's consideration of the American standard FASB Statement No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets with the objective of reducing differences between IFRS and US GAAP that are capable of resolution in a relatively short time.
The standard adopts the classification "held for sale" and introduces the concept of a "disposal group", being a group of assets to be disposed of, by sales or otherwise, together as a group in a single transaction, and liabilities directly associated with those assets that will be transferred in the transaction. IFRS 5 requires that assets or disposal groups that are classified as held for sale are:
(i) carried at the lower of carrying amount and fair value less costs to sell - which means that the related assets cease to be depreciated - and;
(ii) presented separately on the face of the balance sheet.
EFRAG has commented on the ED Disposal of Non-current Assets and Presentation of Discontinued Operations on 27 October 2003.
EFRAG has sumbitted its endorsement advice letter to the EC on 4 June 2004.