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IFRS 5 Non - Current Assets Held for Sale & Discontinued

A non- current assets (or) a disposal group can be classified HFS if its CV will
be recorded through principally sales transaction rather than continue use.
If all of the following criteria are met, a non-current assets (or) disposal group
(subsidiary) can be classified as HFS.
(1) It is available for immediate sales at its present condition
(2) Sales is highly probable that sales transactions is completed within one
year from classification date.
(3) Management is committed to a plan for sales i.e search actively for
willing buyer.
(4) It is actively marketable at a reasonable price comparable with current
market price.
(5) It is unlikely that the plan is significantly changed (or) withdrawn.
Initial measurement
Initial value of HFS at classification date = CV of PPE
(Under cost model)
HFS NCA Debit (Carrying amount)
PPE Cr (Carrying amount)
PPE under (fair value model)
*If a non - current assets previously revalued is now classified as HFS, it should
be remeasured with fair value before classification of HFS.
Before classification HFS, CV of PPE ~ FV of PPE
Mostly decrease = Impairment loss expense = P/L
Rarely increase = RR = OCI
There is reversal.
Step (2) Initial value of HFS = FV of PPE

Subsquent Measurement
 There is no more depreciation .But it should be made for impairment
testing.(IT = CV ~`FV less cost to sell)
 IFRS 5 states that value of HFS is Lower of CV & FV less cost to sell
 If CV > FV less cost to sell, there is impairment loss. It is recorded as
expense in P/L
 If CV < FV less cost to sell, there is no impairment loss.

The value of HFS assets is Lower of Carrying value. (same

as IAS 2).
*IFRS 5 prohibits the classifications of HFS, if HFS criteria are met
reporting date but before approval date because criteria do not meet at
reporting date.
*It should be treated as non-adjusting event under Ias 10.It should be

Presentation of HFS NCA

IFRS 5 states that a non -current asset classified as HFS should separately
presented from other assets in SOFP under last line total assets (or) current
If a disposal group is classified as HFS total assets and total liabilities of
disposal group should be presented separately from other assets and liabilities
in SOFP. They should be recorded as two line figures under last line of total
assets & total liabilities.

*If CV of a disposal group is reduced to FV less costs to sell, total impairment
loss should be allocated to each individuals assets in a disposal group
according to IAS 36 allocation basic.


S Sales in highly probable
A Available for sales
L Locate for suitable buyer with price
E Expected to sell within one year

Discontinued Operation
If criteria of HFS NCA are met, automatically criteria of discontinued
operation are met.
Presentation of SOPOL
IFRS 5 requires that the result of discontinued operation should be presented
separately from other result of continuing operation as a single line as follows.
 Profit or loss after tax including gain or loss on revaluation and Gain or
loss on disposal of HFS NCA.( on the face of SOPL )
 Detail analysis should be disclosed in notes (disclosures).