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Important Stuff on Ind AS 105, Non-current Assets Held for Sale and Discontinued Operations

Indian Accounting Standard (Ind AS) 105, Non-current Assets Held for Sale and Discontinued Operations, Important Material

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Ind AS 105: Non-current Assets Held for Sale and Discontinued Operations

Non-current Assets Held for Sale is required to be shown separately in the Balance sheet from that of other assets. The value would be recovered from sale and not to be treated as assets which are in use in operation of the entity. The results of discontinued operations to be presented separately in the statement of profit and loss.

The information provided helps the users of financial statements to make projections of an entity’s cash flows, earning-generating capacity and financial position.

Objectives

(a) assets that meet the criteria to be classified as held for sale to be measured at the lower of carrying amount and fair value less costs to sell, and depreciation on such assets to cease; and
(b) The results of discontinued operations to be presented separately in the statement of profit and loss.

Scopes

The classification, presentation and measurement requirements of this Ind AS apply to all recognised non-current assets and disposal groups, except for those assets listed in paragraph 5 which shall continue to be measured in accordance with the Standard noted.

Assets classified as non-current in accordance with Ind AS 1, Presentation of Financial Statements, shall not be reclassified as current assets until they meet the criteria to be classified as held for sale in accordance with this Ind AS. Assets of a class that an entity would normally regard as non-current that are acquired exclusively with a view to resale shall not be classified as current unless they meet the criteria to be classified as held for sale in accordance with this Ind AS.

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