What happens when an entity makes the decision to, principally, recover the carrying amount of a non-current asset through disposal rather than through continued use? In other words, what are the accounting considerations to note when the entity changes the originally intended purpose of a non-current asset from use to sale?

The following questions usually arise among accountants, in this situation:

• At what point is such non-current asset deemed to be “held for sale”?
• What are the accounting reclassifications that should be affected at that point?
• How does the measurement of non-current assets held for sale differ from current assets that are not held for sale, especially where the latter are already measured at revalued amounts?
• What are the measurement implications of non-current assets held for sale at initial reclassification and subsequent thereto?
• What are the deferred tax consequences of reclassifying a non-current asset from recovered through use, to recovered through disposal, if any?
• What if a group of assets are disposed of together in one single transaction and such ‘disposal group’ is regarded to be so significant that it represents a segment of the entity that is now a ‘discontinued operation’?

If these questions leave you somewhat stumped or even just curious, please do consider joining Anton van Wyk CA(SA) for this highly informative on-demand short course clarifying the most important underlying principles contained in IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

In completing this course, you will have developed the professional competencies listed in the green block below.