Title: Mastering IFRS 5: Non-current Assets Held for Sale and Discontinued Operations

Welcome to Completed Ledgers, your go-to source for valuable bookkeeping insights. In this article, we will delve into a crucial aspect of financial reporting known as IFRS 5: Non-current Assets Held for Sale and Discontinued Operations. Understanding this International Financial Reporting Standard (IFRS) is essential for accountants, auditors, and financial professionals alike. So, let's embark on an informative journey that sheds light on IFRS 5 and its implications. And remember, for more expert bookkeeping tips, don't forget to visit and subscribe to our blog at www.completed-ledgers.com! 

The Essence of IFRS 5:  

IFRS 5 provides guidance on how entities should classify, measure, and disclose non-current assets held for sale and discontinued operations. The standard helps ensure transparency and comparability when reporting assets that are no longer a part of an entity's ongoing operations. 

• Non-current Assets Held for Sale:  

Non-current assets held for sale are assets that an entity intends to sell in their present condition and state. These assets include property, plant, and equipment, investment properties, intangible assets, and long-term investments. To be classified as held for sale, the asset must meet specific criteria, such as being available for immediate sale and being highly probable of being sold within a year. 

Example: Imagine a manufacturing company decides to divest one of its production facilities due to a strategic shift in business operations. Once the decision is made and a formal plan is in place, the company must classify the facility as a non-current asset held for sale. They would then revalue the asset at its fair value less costs to sell. 

• Discontinued Operations:  

Discontinued operations refer to components of an entity that have been disposed of or are classified as held for sale. A component can be a segment of operations, a reporting unit, a subsidiary, or an equity investment. When a component meets the criteria of being discontinued, the entity must report it separately in its financial statements. 

Example: Let's say a retail company decides to exit a particular product line to focus on other areas of the business. The discontinued product line would be considered a discontinued operation. The company would disclose the results of the discontinued operation, including the revenue, expenses, and gain or loss from disposal, separately in its financial statements. 

• Measurement and Presentation:  

Non-current assets held for sale should be measured at the lower of their carrying amount or fair value less costs to sell. Impairments should also be considered when valuing these assets. Discontinued operations, on the other hand, require separate presentation in the financial statements to provide users with clear information about their impact on the entity's financial performance. 

• Disclosure Requirements:  

IFRS 5 lays out comprehensive disclosure requirements for non-current assets held for sale and discontinued operations. Entities must disclose information such as the nature of the assets, their carrying amounts, fair value less costs to sell, and the expected timing of the sale. 

Mastering IFRS 5 is crucial for accurate financial reporting, as it ensures transparency and comparability when dealing with non-current assets held for sale and discontinued operations. We hope this detailed overview has provided you with valuable insights into this important standard. Remember, for more bookkeeping tips and industry updates, visit and subscribe to our blog at www.completed-ledgers.com!