Thursday, June 17, 2021

FAR 02 - DISCONTINUED
OPERATIONS AND NON-
CURRENT ASSETS HELD
FOR SALE
SUBSEQUENT INCREASE IN
NON-CURRENT ASSETS HELD FVCTS (RECOVERY)
FOR SALE
- GAIN on recovery is recognised in
INITIAL MEASUREMENT pro t or loss but not to exceed any
• Carrying value
previous accumulated impairment
loss.

• Fair value less cost to sell

• Both at whichever is LOWER

RECLASSIFICATION (NCAHFS
• Initial CV of NCAHFS
TO NCA)
NOTE: 1. Determine the initial CV of NCA on
the date of reclassi cation from
1. Carrying value
NCAHFS to NCA.

- updated carrying value on the date of

• Carrying value of NCA (as if no
reclassi cation as Held for Sale
impairment from the start)

2. The recoverable value should be the

• Recoverable value (FVCTS or
fair value less cost to sell and not the
VIU whichever is HIGHER)

value in use because the intention is

to sell the asset rather than to use the
asset continuously.

3. C a r r y i n g v a l u e > F V C T S =
Impairment Loss
2. Compute any Gain or Loss on
Reclassi cation taken to pro t or
4. Carrying value < FVCTS = No
loss.

Impairment Loss or Gain

5. No subsequent depreciation once

the asset is reclassi ed as Held for
Sale.

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 Thursday, June 17, 2021
PROBLEM 5:

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