EinfachErklärt: „IFRS 5 Zur Veräußerung gehaltene langfristige Vermögenswerte und aufgegeben Geschäftsbereiche“
In our series of articles „Simply explained“ we highlight the international accounting standards that are indispensable for those who prepare accounts.
This episode deals with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.
What does the standard regulate?
Since January 1, 2005, IFRS 5 has regulated the accounting of assets or discontinued operations that are held for sale .
content of the standard
This standard distinguishes between two main themes. On the one hand, the accounting of assets held for sale is explained, on the other hand, he addresses the presentation and disclosures in the notes to discontinued operations.
A sale is the transfer of an item, for example in the form of a sale/purchase. An asset is a good to which a value is attributed, which can be both tangible and intangible. A business area is a financially independent organizational unit that is usually set up according to functional criteria.
IFRS 5 specifically deals with cases where a sale is very likely , the search for a seller has already begun , the sale can take place immediately and a plan and price have been determined.
An asset held for sale is recognized at the lower of its carrying amount or fair value less costs to sell. No scheduled depreciation is planned here.
The assets held for sale or discontinued operations must be listed separately in the balance sheet .
Results from discontinued operations or impairment/appreciation are reported as a single amount in the Profit and Loss Account.
An example?
They are a manufacturer of sportswear and have divided their company into the following business areas: everyday wear, golf wear and equipment, hockey wear and equipment, football wear, cricket wear and equipment. Due to their focus on the EU market and the mild popularity of sport cricket there, they wish to divest the cricket business. A seller, a price and a plan to sell already exist. The sale as such is also very likely. The only thing standing in the way of the sale is a government permit. So can the cricket business be accounted for under IFRS 5?
The requirements for the cricket division are met. The delay in the sale is not due to the company. Rather, there are indications that your company will carry out the sale.
According to IFRS 5, the results of the business area are to be reported in the income statement.
If you have any further questions about this standard, please feel free to contact us.
You can also read the previously published articles in our “Simply explained” series.
IFRS 15 Revenue from Contracts with Customers
IAS 1 Presentation of Financial Statements
Sources :
International Financial Reporting (IFRS) Stefan Müller, Patrick Saile
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