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NON-CURRENT ASSETS HELD FOR SALE ANDDISCONTINUED OPERATIONS

(PFRS No. 5)

Objective of PFRS 5 to specify the accounting for assets held for sale and the

presentation and disclosure of discontinued operations.

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

depreciation on such assets to cease.

b. Assets that meet the criteria to be classified as held for sale to be presented separately on the face of the balance sheet

the results of discontinued operations to be presented separately in the income

statement.

A dico!ti!"ed o#e$%tio!as a component of an entity that either has been disposed of or isclassified as held for sale and: represents a separate major line of business or geographical area of operations.

is part of a single coordinated plan to dispose of a separate major line of business or

geographical area of operations is a subsidiary acquired exclusively with a view to resale.

A coo!e!t of %! e!tit'may be a subsidiary,

a major line of business or

geographical segmentwhose operations and cash flows can be clearly distinguished , operationally and for financialreporting purposes from the rest of the entity.

A component can be clearly distinguished operationally and for financial reporting purposes if its assets

liabilities

revenues

expenses

are di$ect' %tt$ib"t%beto the component.

Ti&i! of Re#o$ti! a component is classified as discontinued operations at the date the entity has actually disposed of the operation or

when the operation meets the criteria to be classified as held for sale.

!"#$ % #$o*ibit t*e $et$o%ctive c%ific%tio!as a discontinued operation when thediscontinued criteria are met after the balance sheet date.

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Coo!e!t C%ified % Hed fo$ S%e

An entity shall classify a component of an entity as +*ed fo$ %e,if its carrying amount will berecovered principally through a sale transaction rather than through continuing use. &hefollowing conditions must be met:

a. 'anagement is committed to a plan to sell.

b. An active program to locate a buyer is initiated.c. &he sale is expected to qualify for recognition as a completed sale within one year from

the date of classification as held for sale. &he sale is highly probable within one year fromthe date of classification as held for sale.

d. &he component is being actively mar(eted for sale at a sales price that is reasonable inrelation to its fair value.

e. Actions required to complete the plans indicate that it is unli(ely that the plan will besignificantly changed or withdrawn.

e%"$e&e!t of Aet of % Coo!e!t C%ified % Hed fo$ S%e

a. &he assets of a component held for sale shall be measured at the lower of its carrying amount and

fair value less costs to sell

b. )hen a sale is expected to occur beyond one year, the entity shall measure the costs tosell at their present value. Any increase in the present value of the costs to sell thatarises from the passage of time shall be presented in profit or loss as a financing cost.

I!co&e St%te&e!t P$ee!t%tio!

!"#$ % provides that the sum of

the post tax profit or loss of the discontinued operation and the post tax gain or loss recogni*ed on the measurement to fair value less cost to sell or

the fair value adjustment on the disposal of the assets

should be presented as a i!e %&o"!t o! t*e f%ce of t*e i!co&e t%te&e!t below theincome from continuing operations.

&he following are disclosed in the notes to financial statements:a. &he amount of revenue, expenses and income or loss attributable to the discontinued

operation during the current period.b. Any impairment loss that is recogni*ed when as of the balance sheet and before the sale

of the discontinued operation the fair value less cost to sell of the net assets of the

discontinued operations is lower than their carrying amounts.c. &he termination cost of employees and other costs which are directly incurred as a result

of the discontinuance are shown as part of discontinued operations.d. Any gain or loss from the actual disposal of the assets and settlement of liabilities of a

discontinued operation is recogni*ed on the date of sale or date of settlement. $uch gainor loss is part of the discontinued operation.

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%%!ce S*eet P$ee!t%tio!

!"#$ % provides that an entity shall also #$ee!t e#%$%te' o! t*e f%ce of t*e b%%!ce *eetthe following information:

a. Assets of the component held for sale shall be presented as a single amount undercurrent assets.

b. Assets of the component held for sale are measured at the lower of fair value less cost tosell and their carrying amount.

c. +iabilities of the component shall be presented separately under current liabilities.d. &he assets and liabilities of the component cannot be offset against each other.

S#eci% Notea. on-depreciation non-current assets of the component held for sale shall not be

depreciated or amorti*ed/ while it is classified as held for sale or while it is part of adisposal group classified as held for sale.

b. 0nterest and other expenses attributable to the liabilities of a disposal group classifiedas held for sale shall continue to be recogni*ed.

C%* Fo/ P$ee!t%tio!

!"#$ % provides that the net cash flows attributable to the operating, investing and financingactivities of a discontinued operation *% be e#%$%te' #$ee!ted o! t*e f%ce of t*e c%*fo/ t%te&e!tor disclosed in the notes.

No! C"$$e!t Aet C%ified % Hed fo$ S%e

a. A non-current asset is an asset that does not meet the definition of an asset.b. A disposal group 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 thatwill be transferred in the transaction.

c. A non current asset is classified as held for sale following the same criteria for adiscontinued operation being classified as held for sale.

e%"$e&e!t of No! C"$$e!t Aet

a. A non current asset held for sale shall be measured at the lower of its carrying amount orfair value less cost to sell.

b. &he write down to fair value less cost to sell is treated as an impairment loss.c. 0f the non current asset is a disposal group, the impairment is apportioned across the

assets.

1oodwill is written off first.

Any remainder of the impairment loss is allocated pro rata to the non currents

assets in the group based on their carrying amounts.

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d. 0f subsequently, there is an increase in the fair value less cost to sell, a gain may berecogni*ed but not to exceed the impairment loss previously recogni*ed.

e. A non current asset classified as held for sale shall not be depreciated.

S#eci% Note

a. An entity shall not classify as held for sale a non current asset or disposal group that is to

be abandoned because its carrying amount will be recovered principally throughcontinuing use.

b. 0f the assets to be abandoned are a major line of business or geographical area ofoperations, they are reported as discontinued operations at the date on which they areactually abandoned.

c. An entity shall measure the non current asset that ceases to be classified as held for saleat the lower of

carrying amount before the asset was classified as held for sale adjusted for any

depreciation or amorti*ation that would have been recogni*ed if the asset had notbeen classified as held for sale

recoverable amount at the date of the subsequent decision not to sell.

d. &he assets and liabilities of a disposal group shall be presented separately and cannot beoffset against each other.

e. &he assets of a disposal group shall be presented as a single amount and described as2non current assets classified as held for sale3 under current assets.

f. &he liabilities of the disposal group shall be presented as a single amount and describedas 2liabilities associated with non current assets classified as held for sale3 under currentliabilities.

4uly 5667

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