IFRS 5 - HFS

• IFRS 5


  Standard on Non-Current Assets Held for Sale and Discontinued Operations
• IFRS 5 requires


  1. Assets and groups of assets that are 'held for sale' (HFS) to be presented separately on SFP

  2. Results of discontinued operations (component of an entity that has been sold, or classified as HFS) to be presented separately in the SOCI
• Asset HFS


  • Non-current asset (or disposal group) should be classified HFS if its carrying amount will be recovered principally through a sale transaction rather than through continuing use
  • The asset must be available for immediate sale in its present condition
  • The sale is highly probable
  • Expected to be completed within one year
  • Management is committed to the sale
  • The asset is being actively marketed
  • The asset offer price must be reasonable in relation to its current fair value
  • It is unlikely that the plan will change or be withdrawn
  • Asset can still be classified as HFS even if the sale has not actually taken place within one year, but the delay must have been caused by events or circumstances beyond the entity's control and the entity is still committed to sell the asset
• Disposal Group


  A group of assets and liabilities to be disposed of together as a group in a single transaction
• Disposal Group


  • Subsidiary
  • Cash Generating Unit
  • Single Operation
• Measurement of Asset HFS

  1. Measure at lower of carrying value and fair value less costs to sell

  2. No depreciation after being classified as HFS
• Measurement of Asset HFS (if measured under revaluation model)

  1. The asset should be revalued to fair value immediately and recognised in OCI as gain or loss

  2. Selling costs should be charged in profit or loss statement
• Assets classified as HFS should be presented separately from other assets in the statement of financial position
• Discontinued operations


  • A separate line of business (either in terms of operations or location)
  • Part of a plan to dispose of a separate line of business
  • A subsidiary acquired solely for the purpose of resale
• Presentation of Discontinued operations

  1. Disclose a single amount on the face of the statement of profit or loss and other comprehensive income comprising the profit or loss of the disposal group up to the disposal date and the profit or loss on the disposal of the disposal group or loss on the measurement to fair value less costs to sell

  2. Disclose an analysis of the above single amount in the notes of financial statements

  3. Disclose the net cash flows attributable to the operating, investing and financing activities of discontinued operations
• Under UK GAAP (FRS 102), there is no 'held for sale' category for PPE which is to be disposed of