Noncurrent Asset Flashcards
What is PFRS 5?
Non-Current Assets Held for Sale and Discontinued Operations
This is an asset that does not meet the definition of a current asset.
Non-current asset
This is 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.
Disposal group
When does a non-current asset become held for sale?
When the carrying amount of the asset can be recovered through sale rather than contuing use.
aka
When the entity intends to sell it to recover the carrying amount
What is the measurement of a non-current asset held for sale?
Lower of carrying or fair value less cost of disposal
Should you still depreciate a noncurrent asset classified as held fro sale?
Not anymore
If the FV less cost of disposal is lower than the carrying amount of the asset or disposal group, the write down to fair value less cost of disposal is treated as?
Impairment loss
Should an entity still classify as held for sale a noncurrent asset or disposal group that is to be abandoned?
No
Should an entity account for a noncurrent asset that has been temporarily taken out of its use as if it had been abandoned?
No
How should an entity measure a noncurrent asset that ceases to be classified as held for sale?
Lower of CA before asset was classified or the recoverable amount at the date of subsequent decision not to sell
True or False: The recoverable amount is the lower between fair value less cost of disposal and value in use.
False. It is the higher between the two.
Are noncurrent assets classified as held for sale remain noncurrent or become current assets?q
Current assets
How are non-currents assets held for sale be presented?
a single amount in “non-current assets classified as held for sale” under current assets
How are liabilities the disposal group presented?
single amount in the line item “liabilities directly associated with the non-current asset held for sale” under current liabilities.
