IFRS 5 sets rules how to treat non-current assets held for sale. Assets held for sale are not depreciated and are measured at the lower of carrying amount and fair value less costs to sell, and are presented separately in the statement of financial position. Specific disclosures are also required for discontinued operations and disposals of non-current assets.
What are the conditions required for an asset (or ‘disposal group’) to be classified as held for sale?
- Management is committed to a plan to sell.
- The asset is available for immediate sale.
- An active program to locate a buyer is initiated.
- The sale is highly probable, within 12 months of classification as held for sale.
- The asset is being actively marketed for sale at a sales price reasonable in relation to its fair value.
- Actions required to complete the plan indicate that it is unlikely that plan will be significantly changed or withdrawn.