Professional Documents
Culture Documents
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 1
Learning objectives
Understand the criteria for classifying existing assets as held for sale Understand the measurement and presentation requirements for assets classified as held for sale Understand the classification criteria and presentation requirements for discontinued operations
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 2
Agenda
Objectives and scope of IFRS 5 Held for sale Discontinued operations Special issues Key learning points Forthcoming requirements and future developments
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 3
Objectives of IFRS 5
Specifies Measurement; Presentation; and Disclosure requirements for assets held for sale and discontinued operations Part of project to reduce differences with U.S. GAAP: Partially converged with FAS 144 but differences remain Exposure draft Discontinued Operations Proposed amendments to IFRS 5 reduces further differences
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 4
Scope of IFRS 5
Classification and presentation requirements apply to all noncurrent assets and disposal groups (as a whole) Measurement requirements apply to all non-current assets and disposal groups (as a whole) except the following: financial assets within the scope of IAS 39; deferred tax assets (IAS 12); assets related to employee benefits (IAS 19) and insurance contracts (IFRS 4); certain assets whose subsequent measurement is based upon fair value (e.g., investment properties). Excluded assets are measured using the IFRSs that normally apply to such items. This also applies if they are part of a disposal group.
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 5
Agenda
Objectives and scope of IFRS 5 Held for sale Classification Measurement Presentation Discontinued operations Special issues Key learning points Forthcoming requirements and future developments
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 6
Non-current asset
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Disposal group
Group of assets
(must include at least one non-current asset within the scope of IFRS 5)
+
Directly associated liabilities
=
Held for sale?
Disposal group
Yes, if carrying amount to be recovered principally through sale (same criteria as for individual assets)
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 8
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 9
IFRS 5 - 10
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 11
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 12
Subsequent remeasurement
Assets (disposal groups) in measurement scope of IFRS 5 subsequently remeasured at their fair value less costs to sell recognition of gains is restricted to impairment losses previously recognised under IFRS 5 and IAS 36 Assets and liabilities excluded from measurement scope of IFRS 5 on subsequent remeasurement measured in accordance with the relevant individual IFRSs Gains / losses on a disposal group allocated to the non-current assets within the measurement scope of IFRS 5 in the order of IAS 36 allocation included in profit or loss whether or not the asset was (or the disposal group includes assets that were) previously measured at revalued amounts On disposal any gain or loss not recognised prior to the date of sale is recognised on the derecognition of the assets (disposal group)
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 13
Major classes of assets and liabilities disclosed separately either in the statement of financial position or notes
exceptions for certain newly acquired subsidiaries
Gains and losses on remeasurement included in profit or loss from continuing operations
unless the group meets the definition of a discontinued operation
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 14
Agenda
Objectives and scope of IFRS 5 Held for sale Discontinued operations Classification Presentation Special issues Key learning points Forthcoming requirements and future developments
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 15
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 16
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 17
related income tax expense net cash flow attributable to operating, investing and financing activities income from continuing and discontinued operations attributable to owners of the parent
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 18
IFRS 5 - 19
Case study 3
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 20
Agenda
Objectives and scope of IFRS 5 Held for sale Discontinued operations Special issues Key learning points Forthcoming requirements and future developments
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 21
IFRS 5 - 22
Adjustment is recognised in profit or loss unless the asset was measured at a revalued amount Disclosures
Description of facts and circumstances leading to the decision Effect on the results for the period and any prior period presented
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 23
Agenda
Objectives and scope of IFRS 5 Held for sale Discontinued operations Special issues Key learning points Forthcoming requirements and future developments
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 24
Recap Quiz
True or False?
A. A parent company has owned a subsidiary for a number of years, but now its board of directors votes to sell the subsidiary. The subsidiary will be excluded from consolidation because control is expected to be temporary. B. A company has decided to discontinue the operations of its subsidiary X. In accordance with IFRS the results of the operations should be disclosed as extraordinary in the financial statements. C. Measurement provisions of IFRS 5 apply to all noncurrent assets. D. Under IFRS 5 comparatives are restated when assets are classified as held for sale in the current period.
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 25
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 26
IFRS 5 - 27
Impact of classification as: Held for sale: Current assets Non-current assets in scope Non-current assets not in scope Disposal group as a whole Discontinued operation
Measurement
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 28
Agenda
Objectives and scope of IFRS 5 Held for sale Discontinued operations Special issues Key learning points Forthcoming requirements and future developments
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 29
An entity which is committed to a sale plan involving loss of control of a subsidiary has to classify the all assets and liabilities of the subsidiary as held for sale Exposure draft 2008/47 to amend IFRS 5 New definition of discontinued operations based on segments Additional disclosures proposed
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 30
IFRIC 17 Distributions of Non-cash Assets to Owners Amendments to IFRS 5 Scope expanded to include non-current assets (disposal groups) held for distribution to owners acting in their capacity as owners Classify as held for distribution when entity is committed to the distribution
2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
IFRS 5 - 31