IFRS 5 - Discontinued Operations

Date recorded:

Write-down of a disposal group and discontinued operations OCI items

In response to a request made by the Board at its July 2009 meeting to work with the FASB to ensure the IFRS 5 remained consistent with US GAAP, the staff presented the outcome of the work performed on the following matters:

  • a) tentative decision to clarify how an impairment loss should be recognised when the impairment is greater than the carrying amount of the non-current assets in the disposal group;
  • b) tentative decision to remove inconsistencies in disclosure requirements of OCI items relating to discontinued operations; and
  • c) determining whether improvement of disclosures of accumulated OCI is required.

One Board member questioned whether there would be any items left to be addressed if these three matters were resolved. The staff responded that the matter relating to the definition of discontinued operations still needs to be resolved.

Without much deliberation, the Board unanimously agreed with the proposals in the following way:

  • a) The matter dealing with the impairment of a disposal group is significant enough to warrant a separate project, but IFRS 5 is not the right project for it. The Board recommended that the issue should be added to the IAS 36 amendments agenda.
  • b) An amendment to IFRS 5 is no longer appropriate as the matter will be resolved in the project on Financial Statement Presentation.
  • c) The current disclosure requirements of IFRS 5 are sufficient. An amendment to IFRS 5 is not required.

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