IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations


International Financial Reporting Standard 5: Non-current asset held for Sale and Discontinued Operations covers the guidelines regarding two of the confusing issues in accounting. Firstly how to deal with those asset that are not actively being used by the entity and are held in anticipation of sale and secondly how to account for discontinued operations in the financial statements.

Executive Summary

IFRS 5 states that such non-current assets that fulfill the condition to be classified as held for sale must be disclosed on the face of statement of financial position separately from those non-current assets that are to be used on regular basis by entity for better understand of the user of financial statements. Regarding those operations that once formed significant part of entity’s activities are now decided to be closed then profit or losses from such operations should reported as a separate line item on net basis after calculating profits from regular operations.