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

Assets classified as __________ in accordance with IAS 1 Presentation of Financial Statements _________ they meet the criteria to be classified as held for sale in accordance with IFRS 5.

In February 20X4, Walley Corp decided to sell it’s entire Plant division. The Plant division was a major part of Walley Corp’s business and the sale will result in a strategic change in direction for the company.

The sale was completed in January 20X5 and resulted in a gain on disposal of €500,000. In 20X4 Plant’s net losses were €350,000 and €20,000 in 20X5 up until the date of sale.

Excluding taxation, what should the net gain/(loss) to be reported in the income statements of Walley Corp for its Plant division?

Under which circumstances shall an entity classify a non-current asset as held for sale?

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.