BACKGROUND . The users of the financial statements should be informed about these events. [FRS 102 para 27.9(f)]. Therefore, IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations was issued to highlight the NON-CURRENT ASSETS HELD FOR SALE and DISCONTINUED OPERATIONS . Noncurrent asset classified as held for sale shall be presented in the statement of financial position as a. Reclassification of a non-current asset - held for sale. An entity classifies a non-current asset as held-for-sale if its carrying amount will be recovered mainly through selling the asset rather than through usage. An NCA is an asset that does not meet the above ‘current asset’ definition. Asset (or disposal group) that are 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. Current asset b. The same applies for liabilities of a disposal group classified as held for sale. Available-for-sale (AFS) is an accounting term used to describe and classify financial assets. A non-current asset (or disposal group) that is held for sale must be up for sale in its present condition and the sale … The objective of IFRS 5 is to specify how assets that are classified as ‘held for sale’ should be presented and disclosed within a set of financial statements, and discontinued operations. Classification of non-current assets (or disposal groups) as held for sale or as held for distribution to owners. Other noncurrent asset c. Noncurrent investment d. Property, plant and equipment: a: In order for a noncurrent asset to be classified as held for sale, the sale must be highly probable. 4 eg. In the statement of financial position (IFRS5.38): you shall present a non-current asset or assets of a disposal group classified as held for sale separately from other assets. The External Auditors would need to be assured that non-current assets classified as held for sale are: A. If the asset continues to be held for sale but at a price in excess of its fair value, then in the absence of a price reduction the asset is not available for immediate sale. 1. The classification also applies to disposal groups, which are a group of assets and possibly some liabilities which an entity intends to dispose of in a single transaction. B. The sale … IN1 Hong Kong Financial Reporting Standard 5 Non-current Assets Held for Sale and Discontinued Operations (HKFRS 5) sets out requirements for the classification, measurement and presentation of non-current assets held for sale and replaces SSAP 33 Discontinuing Operations. When a company makes the decision to sell an asset or to stop some part of its business, it is making a decision that affects the future cash flows, profitability and overall financial situation. FRS 102 does not have a ‘held for sale’ classification for non-current assets or groups of assets and liabilities. 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