Please provide summary on Ind AS 105 - Non-current Assets Held for Sale and Discontinued Operations
Please provide summary on Ind AS 105 - Non-current Assets Held for Sale and Discontinued Operations 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. The classification and presentation requirements of this Ind AS apply to all recognised non-current assets1 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 which shall continue to be measured in accordance with the Standard.
Dear Friend > Ind AS 105 - Non-current Assets Held for Sale and Discontinued > Operations Ind AS 105, ‘Non-current assets held for sale and discontinued operations’, is relevant when any disposal occurs or is planned including distribution of non-current assets to shareholders. The held-for-sale criteria in Ind AS 105 apply to non-current assets (or disposal groups) whose value will be recovered principally through sale rather than through continuing use. The criteria do not apply to assets that are being scrapped, wound down or abandoned. Ind AS 105 defines a disposal group as a group of assets to be disposed of, by sale or otherwise, together as a group in a single transaction, and liabilities directly associated with those assets that will be transferred in the transaction. The non-current asset (or disposal group) is classified as ‘held for sale’ if it is available for immediate sale in its present condition and its sale is highly probable. A non-current asset (or disposal group) is classified as ‘held for distribution to owners’ when the entity is committed to such distribution. For a distribution to be highly probable, actions to complete the distribution need to have been initiated and should be expected to be completed within one year from the date of classification. Non-current assets (or disposal groups) classified as held for sale or as held for distribution are: -- Measured at the lower of the carrying amount and fair value less costs to sell -- Not depreciated or amortised -- Presented separately in the balance sheet (assets and liabilities should not be offset) A discontinued operation is a component of an entity that can be distinguished operationally and financially for financial reporting purposes from the rest of the entity. An operation is classified as discontinued only at the date on which the operation meets the criteria to be classified as held for sale or when the entity has disposed of the operation. The date of disposal of a subsidiary or disposal group is the date on which the control passes. The consolidated income statement includes the results of a subsidiary or disposal group up to the date of disposal and the gain or loss on disposal. Thanks