1. Non-current Assets ‘held for sale’ and Discontinued Operations - Introduction
OVERVIEW
Aim
The aim of this workbook is to assist the individual in understanding IFRS5 Non-current Assets ‘held for sale’ and Discontinued Operations according to IFRS.
Reasons for issuing IFRS5
Separately highlighting the results of discontinued operations provides users with information that is relevant in assessing the ongoing ability of the bank to generate cash flows.
Providing information about assets and groups of assets and liabilities to be disposed of is also of benefit to users. Such information should assist them in assessing the timing, amount and uncertainty of future cash flows.
Having ownership of an asset, its value is recovered by use, or by resale, or both.
Whilst awaiting disposal, an asset may be in current use by the bank.
If an asset is available for immediate sale, the remaining use of the asset is incidental to its recovery through sale and the carrying amount of the asset will be recovered principally through sale.
A distinction is drawn between an asset that is to be sold and an asset that is to be abandoned, because the former will be recovered principally through sale and the latter (an asset that is to be abandoned) through its continuing use.
