PFRS 5 NON-CURRENT ASSETS HELD FOR SALE AND

DISCONTINUED OPERATIONS

I. NATURE
PFRS 5 prescribes the accounting for assets held for sale including disposal groups,
and the presentation and disclosure of discontinued operations.
Noncurrent assets within the scope of PFRS 5:
a. Property, plant and equipment
b. Investment property measured under the cost model
c. Investment in associate, subsidiary, or joint venture
d. Intangible assets
Noncurrent assets outside the scope of PFRS 5:
a. Deferred tax assets
b. Assets arising from employee benefits
c. Financial assets within the scope of PFRS 9 financial instruments
d. Investment property measured under the fair value model

II. RECOGNITION
A noncurrent asset (or disposal group) is classified as held for sale or held for
distribution to owners of its carrying amount will be recovered principally through a
sale transaction rather than through continuing use.

Conditions for classification as held for sale:

A. Noncurrent asset or disposal group is available for immediate sale in its present
condition subject only to terms that are usual and customary
B. Sale is highly probable, evidenced by:
i. Entity’s management is committed on selling the asset
ii. Entity is actively locating a buyer
iii. Sale is reasonable in relation to the asset’s (or disposal group’s) current fair
value.
iv. Sale is expected to be completed within one year from the date of
classification
v. It is unlikely that the plan to sell will be withdrawn

Discontinued operations is a component of an entity that either has been disposed of

or is classified as held for sale, and
a. Represents a major line of business geographical area of operations
b. Part of a single coordinated plan to dispose of a separate major line of business
or geographical area of operations
c. A subsidiary acquired exclusively with a view to resale
III. MEASUREMENT
Held for sale assets are initially and subsequently measured at the lower of carrying
amount and fair value less costs to sell.
Costs to sell are discounted to their present value if the sale is expected to occur
beyond one year.
Assets classified as held for distribution to owners are measured at the lower of carrying
amount and fair value less costs to distribute.
Held for sale assets that are acquired as part of a business combination are measured
at fair value less costs to sell, not at fair value as required by PFRS 3.

IV. TRANSACTION
Discontinued operations:
1. A company eliminates the results of operations and cash flows of a component of
an entity from its ongoing operations.
2. There is no significant continuing involvement in that component.

V. PRESENTATION

Presentation in the Statement of Financial Position

Held for sale assets are presented in the statement of financial position as current
assets.
The assets and liabilities of a disposal group are presented separately. Offsetting is
prohibited.

Presentation of discontinued operations

The results of discontinued operations are presented in the statement of profit or loss
and other comprehensive income as a single amount comprising the total of the ff.:
a. Post-tax profit or loss of discontinued operations; and
Post-tax gain or loss recognized on the measurement to fair value less costs to sell or
on the disposal of the assets constituting discontinued operation.