"IFRS 5: Non-current Assets Held for Sale and Discontinued Operations"

IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations" is an international financial reporting standard that provides guidance on the accounting for assets held for sale, and the presentation and disclosure of discontinued operations. The standard is intended to enhance the quality of information available to users of financial statements, enabling them to make more informed assessments of the entity’s financial position and performance. Key elements of IFRS 5 include:

1. Classification of Non-current Assets as Held for Sale: IFRS 5 applies to non-current assets (and disposal groups) that are held for sale and sets out criteria for their classification. An asset (or disposal group) is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use.

2. Measurement of Non-current Assets Held for Sale: These assets are measured at the lower of carrying amount and fair value less costs to sell. Once classified as held for sale, these assets are not depreciated.

3. Presentation in Financial Statements: Non-current assets classified as held for sale and the assets and liabilities of a disposal group classified as held for sale are presented separately in the statement of financial position. The results of discontinued operations are presented separately in the statement of profit or loss.

4. Criteria for Discontinued Operations: A discontinued operation is a component of an entity that either has been disposed of or is classified as held for sale, and:

- Represents a separate major line of business or geographical area,

- Is part of a single coordinated plan to dispose of a separate major line of business or geographical area, or

- Is a subsidiary acquired exclusively with a view to resale.

5. Disclosure Requirements: IFRS 5 requires disclosures that enable users to evaluate the financial effects of discontinued operations and disposals of non-current assets or disposal groups. This includes detailed disclosure of the financial performance and cash flows of discontinued operations.

6. Changes in Plans for Sale: The standard provides guidance on what to do if an entity’s plan for sale changes or if the criteria for classification as held for sale are no longer met.

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