Non Current Assets Held For Sale and Discontinued Operations
IFRS5 describes the conditions for re-allocating non-current assets held for sale and the disclosure of discontinued operations.
The measurement provisions of this IFRS* do not apply to the following assets, which are covered by the Standards listed, either as individual assets or as part of a disposal group: (a) deferred tax assets (IAS 12 Income Taxes). (b) assets arising from employee benefits (IAS 19 Employee Benefits). (c) financial assets within the scope of IAS 39 Financial Instruments: Recognition and Measurement. (d) non-current assets that are accounted for in accordance with the fair value model in IAS 40 Investment Property. (e) non-current assets that are measured at fair value less estimated point-of-sale costs in accordance with IAS 41 Agriculture. (f) contractual rights under insurance contracts as defined in IFRS 4 Insurance Contracts.
It will be helpful for Adempiere users to identify the organisations or organisation groups that comprise of the business unit which are intended to be sold or discontinued. A reasonable practice may be to create a discontinued organisational group and then move organisations in the organisation tree in and out of it as required for disclosure purposes. You would then need to create your financial reports to include a column for this organisational group.
With respect to Non-Current Assets held for resale, Adempiere provides account elements to record the asset classes separately and does not provide accounts for their depreciation as the assets are not to be depreciated whilst held for sale.
There are additional disclosures required including:
- a description of the non-current asset (or disposal group);
- a description of the facts and circumstances of the sale, or leading to the expected disposal, and the expected manner and timing of that disposal;
- the gain or loss recognised in accordance with paragraphs 20–22 and, if not separately presented on the face of the income statement, the caption in
the income statement that includes that gain or loss;
- if applicable, the segment in which the non-current asset (or disposal group) is presented in accordance with IAS 14 Segment Reporting.
Summary
Adempiere is compliant with IFRS5 in respect of making postings to the general ledger. Some client configuration may be necessary in or to provide the relevant disclosure for reporting of discontinued operations and asset groups will need to be configured to meaningful groups for the entity concerned.
Michael Judd, 2 July 2008
n.b. If you have any specific requirements in regards to IFRS3 please do not hesitate to get in contact with me for further clarification.
