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. The property, plant and equipment and inventory were stated at deemed cost on moving to IFRS. In 20X4 Plant’s net losses were €350,000 and €20,000 in 20X5 up until the date of sale. Show how the disposal group would be accounted for in the financial statements for the year ended 31 December 2006. Assets Held for Sale 11 / 41. There are two notable exceptions: shares issued in a business combination, which are dealt with under IFRS 3, Business Combinations; and contracts for the purchase of goods that are within the scope … according to IFRS 5 Non Current Assets Held for Sale, assets held for the in the … An entity has agreed in a directors’ meeting to sell a building, and has tentatively started looking for a buyer for the building. The price of the building has been fixed at $4m and a surveyor has valued the building based on market prices at $3.6m. The building will not be classified as held-for-sale as it is not available for immediate sale because, until new premises have been found, the office staff will remain in the existing building. The disposal group, however, would be classified as held-for-sale because the delay is caused by events or circumstances beyond the entity’s control, and there is evidence that the entity is committed to selling the disposal group. Please note the following: All question papers and solutions are the copyright of ACCA and can only be used for classroom and … Accounting policies, changes in accounting estimate and errors (IAS 8) Chapter 10. If the asset is temporarily not being used, it is not deemed to be abandoned. Evaluation and review. Also, the directors have only tentatively started looking for a buyer which may indicate that the entity is not committed to the sale. 5 steps that need to be followed in revenue recognition: 1. Hence you can not start it again. Sample exam papers for recent DipIFR exam sessions are listed below. Test yourself with questions about B10abcd. These papers featured in past exam sessions and should therefore be used as a guide only. The equipment will not be treated as abandoned as it will subsequently be brought back into usage, and the manufacturing units will be treated as discontinued operations. An entity has stopped using certain plants because of a downturn in orders. If the criteria for classifying a non-current asset as held-for-sale occur after the balance sheet date, then the non-current asset should not be shown as held-for-sale but disclosure of the fact should be made. IFRS 5 - Discontinued operations - ACCA Financial Reporting (FR) IFRS 5 - Discontinued operations - ACCA Financial Reporting (FR) Skip to primary navigation; ... the discontinued operations iwas adjusted for in year 2016 though the question stated that the business wound up in March 2017. This is my 2nd attempt and i really wanna get … However, a disposal group that is to be abandoned may meet the definition of a discontinued activity. Press question mark to learn the rest of the keyboard shortcuts. Log In Sign Up. Posted by 5 days ago. 2 2. Free sign up Sign In. SBR predictions. Chartered Education IFRS MCQs have more than 1,100 questions like these covering all subjects. Please visit our global website instead, Can't find your location listed? Non-current assets held-for-sale and assets of disposal groups must be disclosed separately from other assets in the balance sheet. ACCA BT F1 MA F2 FA F3 LW F4 Eng PM F5 TX F6 UK FR F7 AA F8 FM F9 SBL SBR INT SBR UK AFM P4 APM P5 … Which of the following must apply for the sale to be considered highly probable? D3a. Leases (IFRS 16) Chapter 13. IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations This article is relevant for ACCA F7 and P2 plus AAT and CIMA papers. Under which circumstances shall an entity classify a non-current asset as held for sale? the subsidiary was acquired exclusively with a view to resale. The entity will continue to use the building until another building has been found with equivalent facilities, and in a suitable location for the office staff, who will not be rel… … In the balance sheet, the major classes of assets and liabilities classified as held-for-sale should be separately disclosed on the face of the balance sheet or in the notes. B10a. IFRS 5 requires detailed disclosure of revenue, expenses, pre-tax profit or loss, and the related income tax expense either in the notes or on the face of the income statement. After the re-measurement, the entity will recognise an impairment loss of $16m on re-measurement to the lower of carrying amount and fair value less cost to sell. ACCA Diploma in IFRS DipIFR December 2015 Exam - Questions & Answers Standard: IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations Page 1 Question (4- B) You are the financial controller of Omega, a listed company which prepares consolidated financial statements in accordance with International Financial Reporting Standards (IFRS… Register; Log In; CPD IFRS 5 - Non-current Assets HFS and Discontinued Ops ... IFRS 5 — Non-current Assets for Sale or Discontinued 4 Steps ... playlist_add_check Quiz - Identification and Presentation 5 Questions ondemand_video Discontinued Operations 13m 35s playlist_add_check Quiz - Discontinued Operations 5 … It is accredited by the ACCA (Association of Chartered Certified Accountants) and is aimed at ... past exam questions to develop examination skills. Revenue Recognition - IFRS 15 - 5 steps from past papers in ACCA FR (F7). IFRS 5 Non Current Assets Held for Sale. There are several other discloses required, including a description of the non-current assets of a disposal group, a description of the facts and circumstances of the sale, and the expected manner and timing of that disposal. IFRS 5 requires that immediately before the initial classification of the disposal group as held-for-sale, the carrying amounts of the disposal group be measured in accordance with applicable IFRS, and any profit or loss dealt with under that IFRS. General IFRS Discussion (129) IFRS for SMEs (5) IFRS 1 - First-time Adoption of International Financial Standards (15) IFRS 2 - Share-based Payment (9) IFRS 3 - Business Combinations (10) IFRS 4 - Insurance Contracts (6) IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations (3) IFRS 6 - Exploration for and … ACCA CIMA CAT DipIFR Search. Earned Point(s): 0 of 0, (0) In February 20X4, Walley Corp decided to sell it’s entire Plant division. Quiz: IFRS 5 Non-current assets held for sale and discontinued operations (Conceptual) The quiz tests your theoretical and conceptual understanding of accounting for Non-current assets held for sale and discontinued operations (International Financial Reporting Standard 5). ACCA Financial Reporting (FR) Chapter 8 - Non-current assets held for sale and discontinued operations (IFRS 5) Questions - Free ACCA … This site uses cookies. ACCA CIMA CAT DipIFR Search. ACCA CIMA CAT DipIFR Search. Any subsequent increases in fair value less cost to sell of the asset can be recognised in profit and loss to the extent that it is not in excess of the cumulative impairment loss that has been recognised. It conducts DipIFR exam in every June and December months. FREE Courses Blog. Retrospective classification as a discontinued operation where the criteria are met after the balance sheet date is prohibited by IFRS 5. An entity has agreed in a directors’ meeting to sell a building, and has tentatively started looking for a buyer for the building. Thank for trying this quiz. Non-current assets or disposal groups classified as held-for-sale should not be depreciated. These papers featured in past exam sessions and should therefore be used as a guide only. Terms & Conditions Thus, in this case, there would be separate disclosure of the disposal group as follows. Free sign up Sign In. Entities often acquire non-current assets exclusively with a view to disposal. Free IFRS 2 multiple choice quiz. Results are being recorded. IFRS 5 Non-current Assets Held for Sale and Discontinued Operations prescribes the recognition criteria for non-current assets held for sale. Additionally, the price being asked for the building is above the market price, and is not reasonable compared to that price. This means that the sale time is difficult to determine and it may take longer than one year to sell the disposal group. If you’d like to keep improving your knowledge of IFRS, sign up for a subscription where you can access all our questions. represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of separate major lines of business or geographical area of operations, or. Excluding taxation, what should the net gain/(loss) to be reported in the income statements of Walley Corp for its Plant division? Just before the initial classification of a non-current asset (disposal group) as held-for-sale, it should be measured in accordance with IFRS. Inventory (IAS 2) Chapter 10. Acowtancy. IFRS 5 Non-current Assets Held for Sale IFRS 5 Non-current Assets Held for Sale and Discontinued Operations says that a discontinued operation is a component of an entity that has been sold, or which is classified as held for sale, and which is: a separate line of business (either in terms of operations or location) part … IFRS 5 provides unconditional requirement that the sale of the non-current asset held for sale should be expected to qualify for recognition as a completed sale within one year from the date of classification. ACCA BT F1 MA F2 FA F3 LW F4 Eng PM F5 TX F6 UK FR F7 AA F8 FM F9 SBL SBR INT SBR UK AFM P4 APM P5 … ification in Financial Accounting using International Financial Reporting Standards (IFRS/IAS). ACCA CIMA CPD FIA (ACCA) AAT. The global body for professional accountants, Can't find your location/region listed? Acowtancy. In this article, Steve Collings looks at how an entity should account for non-current assets which have been classified as held for sale. IFRS 5 deals with the accounting for non-current assets held-for-sale, and the presentation and disclosure of discontinued operations. Such a non-current asset will be classified as held-for-sale at the date of the acquisition only if it is anticipated that it will be sold within the one-year period, and it is highly probable that the held-for-sale criteria will be met within a short period (normally three months) of the acquisition date. they may be used for a selective number of entities, or every entity (as happened in NZ from 2007: including a charity, sports club, the national Government, or a local city council). Take practice test on IFRS Basics & boost your chances to excel. It is unlikely that the entity will sell the building for that price. Identify the contracts Do well to download the Financial Reporting materials here. Contact information for your local office, Virtual classroom support for learning partners, Financial assets (profit of $4m recognised in equity), Amounts recognised directly in equity relating to non-current assets held-for-sale, Liabilities directory associated with non-, the assets must be available for immediate sale in their present condition and its sale must be highly probable, the asset must be currently marketed actively at a price that is reasonable in relation to its current fair value, the sale should be completed, or expected to be so, within a year from the date of the classification, and. Agriculture (IAS 41) Chapter 11. Non-current assets held for sale and discontinued operations (IFRS 5) Chapter 9. Assets Held for Sale. The loss will be charged against profit or loss. IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations, IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations Quiz. As regards the presentation in the cash flow statement, the net cash flows attributable to the operating, investing and financing activities of the discontinued operation should be separately shown on the face of the cash flow statement or disclosed in the notes. AAA P7 INT. The classification also applies to disposal groups, which are a group of assets and possibly some liabilities which an entity intends to dispose of in a single transaction. Question 1 of 2 Summary Skip. ACCA DipIFR Sample Question Papers of both June and … Under IFRS, property, plant and equipment would be stated at $26m, and inventory stated at $18m. SBR predictions. ACCA conducts Diploma in IFRS Exam twice in a year. 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