This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice (http://www2.deloitte.com/ca/en/legal/cookies.html) for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

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

Effective date:

First effective as Canadian GAAP under Part I for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011, except for subsequent amendments.  Earlier application of Part I was permitted.

Published by IASB:

March 2004

Included in Part I of CPA Canada Handbook:

January 2010

Reach out to our IFRS 5 Specialist

Diana De Acetis

Overview

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations outlines how to account for non-current assets held for sale (or for distribution to owners).

The objective of IFRS 5 is to specify the accounting for assets held for sale, and the presentation and disclosure of discontinued operations. IFRS 5 requires:

  • 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
  • assets that meet the criteria to be classified as held for sale to be presented separately in the statement of financial position and the results of discontinued operations to be presented separately in the statement of comprehensive income.

An entity shall classify non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. An entity shall measure a non-current asset (or disposal group) classified as held for sale at the lower of its carrying amount and fair value less costs to sell.

A discontinued operation is a component of an entity that either has been disposed of or is classified as held for sale, and

  • represents either a separate major line of business or a geographical area of operations
  • is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations, or
  • is a subsidiary acquired exclusively with a view to resale and the disposal involves loss of control.

History of IFRS 5

The following table shows the history of this standard subsequent to the adoption of IFRS in Canada. 

Date1

Development

Comments

Included in Part I of the CPA Canada Handbook2

January 2010

Part I of the CPA Canada Handbook issued

Effective for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. Earlier application is permitted.

January 2010

September 25, 2014

Amended by Annual Improvements to IFRSs 2012 - 2014 Cycle (changes in methods of disposal)

The amendments clarify the application of the guidance in the standard in circumstances in which an entity reclassifies an asset (or disposal group) from held for sale to held for distribution (or vice versa), and the circumstances in which an asset (or disposal group) no longer meets the criteria for held for distribution.

The amendments are effective for annual periods beginning on or after January 1, 2016. Earlier application is permitted.

 

February 2015

Notes

  1. For further details of relevant developments prior to this, please refer to our Deloitte Global section
  2. Newly issued, amended or revised IFRSs are part of Canadian GAAP only after they are approved by the Accounting Standards Board in accordance with its due process.

The above summary does not include details of consequential amendments made as the result of other projects.

Related Interpretations

  • None

Related IFRIC Agenda Rejection Notices

The rejection notices are available in our Deloitte Global section.

  • IFRS 5 — Classification in conjunction with a planned IPO, but where the prospectus has not been approved by the securities regulator (September 2013)
  • IFRS 5 — Reversal of disposal group impairment losses relating to goodwill (May 2010)
  • IFRS 5 — Write-down of a disposal group (November 2009)
  • IFRS 5 — Disclosures (September 2007)
  • IFRS 5 — Plan to sell the controlling interest in a subsidiary (July 2007)

AcSB’s IFRS Discussion Group meetings

  • October 5, 2017 - IFRS 5: Abandonment or Sale of a Mineral Property
  • November 29, 2016 - IFRS 5 and IFRS 9: Application of IFRS 9 to Transactions of a Subsidiary when the Subsidiary is Held for Sale and Settlement of a Shareholder Loan
  • September 13, 2016 - IFRS 5: Abandonment or Sale of a Mineral Property
  • December 9, 2014 - IFRS 5 and IAS 36: Impairment Measurement

Amendments under consideration

  • None

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.