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Educational Material on Ind AS 105 Non current Assets Held for Sale and Discontinued Operations

Educational Material on Ind AS 105 Non current Assets Held for Sale and Discontinued Operations

Ind AS 105 Non current Assets Held for Sale and Discontinued Operations : Non-current Assets Held for Sale and Discontinued Operations outlines how to account for non-current assets held for sale (or for distribution to owners). In general terms, assets (or disposal groups) held for sale are not depreciated, 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.

Educational Material on Ind AS 105 Non current Assets Held for Sale and Discontinued Operations

Ind AS 105 Non current Assets Held for Sale and Discontinued Operations : In general terms, assets (or disposal groups) held for sale are not depreciated, 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.(This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.)

Objective

The objective of this Indian Accounting Standard (Ind AS) is to specify the accounting for assets held for sale, and the presentation and disclosure of discontinued operations. In particular, this Ind AS requires:

(a) assets that meet the criteria to be classified as held for sale to be measured at the lower of carrying amount and fair value less costs to sell, and depreciation on such assets to cease; and

(b) assets that meet the criteria to be classified as held for sale to be presented separately in the balance sheet and the results of discontinued operations to be presented separately in the statement of profit and loss.

Scope 

  • The classification and presentation requirements of this Ind AS apply to all recognised non-current assets and to all disposal groups of an entity. The measurement requirements of this Ind AS apply to all recognised non-current assets and disposal groups (as set out in paragraph 4), except for those assets listed in paragraph 5 which shall continue to be measured in accordance with the Standard noted.
  • Assets classified as non-current in accordance with Ind AS 1, Presentation of Financial Statements, shall not be reclassified as current assets until they meet the criteria to be classified as held for sale in accordance with this Ind AS. Assets of a class that an entity would normally regard as non-current that are acquired exclusively with a view to resale shall not be classified as current unless they meet the criteria to be classified as held for sale in accordance with this Ind AS.
  • Sometimes an entity disposes of a group of assets, possibly with some directly associated liabilities, together in a single transaction. Such a disposal group may be a group of cash-generating units, a single cash-generating unit, or part of unit.
  • The measurement provisions of this Ind AS do not apply to the following assets, which are covered by the Ind ASs listed, either as individual assets or as part of a disposal group:(a) deferred tax assets (Ind AS 12, Income Taxes). (b) assets arising from employee benefits (Ind AS 19, Employee Benefits). (c) financial assets within the scope of Ind AS 109, Financial Instruments. (d) [Refer Appendix 1] (e) non-current assets that are measured at fair value less costs to sell in accordance with Ind AS 41, Agriculture. (f) contractual rights under insurance contracts as defined in Ind AS 104, Insurance Contracts.
  • The classification, presentation and measurement requirements in this Ind AS applicable to a non-current asset (or disposal group) that is classified as held for sale apply also to a non-current asset (or disposal group) that is classified as held for distribution to owners acting in their capacity as owners (held for distribution to owners).
  • This Ind AS specifies the disclosures required in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations. Disclosures in other Ind ASs do not apply to such assets (or disposal groups) unless those Ind ASs require: (a) specific disclosures in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations; or (b) disclosures about measurement of assets and liabilities within a disposal group that are not within the scope of the measurement requirement of Ind AS 105 and such disclosures are not already provided in the other notes to the financial statements.

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Educational Material on Ind AS 105 Non current Assets Held for Sale and Discontinued Operations 

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Educational Material on Ind AS 105 Non current Assets Held for Sale and Discontinued Operations

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