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IFRS 5 — Change of disposal method

Date recorded:

The project manager gave a brief overview of the project and recommended including proposed amendments to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations in the annual improvements 2012-2014 cycle.

One Board member inquired about the timeline of the project.

The implementation director pointed out that the issuance will probably be in 2015 so the effective date would be 1 January 2016. However, this will be determined at a later stage in the project.

The proposed amendment would respond to requests to clarify the accounting for a change in a disposal plan from a plan to sell a division to a plan to spin off a division and distribute a dividend in kind to its shareholders. Paragraph 26 of IFRS 5 was interpreted by some as requiring this change to be considered a change to a plan of sale and be accounted in accordance with paragraphs 26–29 of IFRS 5.

One Board member had some difficulties with the “uninterrupted” application of the method when the status changes from ‘held for sale’ to ‘held for distribution’. He wonders how a method can be interrupted.

The implementation director replied that this means that there will be no reclassification in between the two different stages.

Aside from that all Board members agree with the proposal.

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