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Pfrs 5 - Noncurrent Asset Held For Sale and Discontinuted Operations Noncurrent Asset Held For Sale

This document discusses accounting for non-current assets held for sale and discontinued operations under PFRS 5. It provides guidance on classifying, measuring, and presenting non-current assets or disposal groups as held for sale or discontinued operations. Key points include: classifying assets as held for sale when certain criteria are met; initially and subsequently measuring at lower of carrying amount or fair value less costs to sell; presenting assets and liabilities of disposal groups separately in the statement of financial position; and presenting results of discontinued operations as a single line item in the statement of comprehensive income.

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Kent Raysil Pamaong
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395 views2 pages

Pfrs 5 - Noncurrent Asset Held For Sale and Discontinuted Operations Noncurrent Asset Held For Sale

This document discusses accounting for non-current assets held for sale and discontinued operations under PFRS 5. It provides guidance on classifying, measuring, and presenting non-current assets or disposal groups as held for sale or discontinued operations. Key points include: classifying assets as held for sale when certain criteria are met; initially and subsequently measuring at lower of carrying amount or fair value less costs to sell; presenting assets and liabilities of disposal groups separately in the statement of financial position; and presenting results of discontinued operations as a single line item in the statement of comprehensive income.

Uploaded by

Kent Raysil Pamaong
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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FAR 6805 Less: Actual CA

PFRS 5 - NONCURRENT ASSET HELD FOR SALE = Gain/loss on reclassification


AND DISCONTINUTED OPERATIONS
REVALUATION MODEL THEN PFRS 5
NONCURRENT ASSET HELD FOR SALE
 Follow revaluation model first
1. NCA/Disposal group - CA is recovered through
 At reclassification date, measure first at FV
sale rather than used in operations
and recognize revaluation
2. NCA should be available for immediate sale in
NCA xx
the present condition
Revaluation surplus xx
3. Sale is highly probable
NCA held for sale xx
a. Management is committed to sell
NCA xx
b. Active program to locate buyers exists
 Any cost of disposal is recognized as
c. Marketed at reasonable price
impairment loss
- Reasonable in relation to FV
Impairment loss xx
d. Sale is expected to be complete within 12
Land held for sale xx
months from the reclassification date
e. It is unlikely that the plan will be  If NCA is sold, reclassify RS to RE for the whole
withdrawn amount of the balance (piecemeal realization
MEASUREMENT if asset is depreciable)
Initial Revaluation surplus xx
Retained earnings xx
 Lower between CA vs FV less cost of disposal
If FV less cost of disposal is lower than CA: DISCONTINUED OPERATIONS
CA – FV less CoD = Impairment loss 1. Dealing with a component of an entity
NCA held for sale xx a. Major line of business or geographic
Accumulated depreciation xx operations
NCA xx b. Part of major line of business or
Subsequent – FV less cost of disposal geographic operations
 Further decrease is recognized as Impairment c. Subsidiary acquired exclusively for resale
loss Classified as discontinued in addition to 1:
Impairment loss xx A. Actually disposed of the operation
NCA held for sale xx B. Operation meets the criteria to be classified
 Increase are treated as reversal but limited as held for sale
only as to extent of cumulative Impairment IMPACT ON STEMENT OF FINANCIAL POSITION
loss  Assets and liabilities of the disposal group is
NCA held for sale xx separately presented as current
Impairment loss xx assets/liabilities
 Classified as current assets IMPACT ON STATEMENT OF COMPREHENSIVE
 Depreciation ceases INCOME
REVERTING NCA HELD FOR SALE TO FOR USE  Presented as a single line item after net
MEASUREMENT income after tax from continuing operations
Initial NIAT from continuing operations xx
 Lower between CA as if asset has not been NIAT from discontinued operations xx
classified as held for sale (cumulative from Net income for the period xx
acquisition until date of subsequent decision NIAT from discontinued operations is
not to sell) vs Recoverable amount computed the same as from continuing operations
- Recoverable amount is higher except certain items are exclusive for discontinued
between value in use vs FV less cost of operations i.e. termination cost, disposal gain/loss
disposal and impairment loss (RA<CA)
Measurement on reversal
Only result from operations of prior period
shall be re-presented as relating to discontinued
operations in the comparative income statement,
assets and liabilities as is.

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