International Financial Reporting Standards_guide.pdf

230 Chapter 19 Noncurrent Assets Held for Sale and Discontinued Operations (IFRS 5)
EXAMPLE 19.2
XYZ Inc is planning to sell a business. The business consists of intangible assets, advances,
and inventory. The example below illustrates how the fair value of the disposal group is
allocated to the individual assets making up the disposal group held for sale, taking into
account the assets that are excluded from the measurement scope of IFRS 5.
Assets
Carrying
value on
November
4, 2009
Fair value
less costs
to sell on
November
5, 2009
Income
statement
on initial
classi fication
Fair value
less costs
to sell on
December
31, 2009
Carrying
amount of
disposal
group at
December
31, 2009
Income
statement
at
December
31, 2009
Intangible 200,000 (200,000)* —†
assets
Advances^ 300,000 330,000 30,000 IAS 39 effective interest
Inventory^ 50,000 40,000 (10,000) IAS 2 impairment to NRV
Total 550,000 350,000 (200,000) 390,000 330,000 160,000 Total income statement
effect
20,000 IFRS 5 gain in the income
statement; otherwise the
30,000 and 20,000 are
double counted.
* Allocate the impairment fi rst to goodwill and then pro rate the other assets of the disposal group that fall within the scope of IFRS 5.
^ Assets that fall outside the measurement scope of IFRS 5 and therefore remeasured according to the appropriate IFRS.
† Amortisation ceases on classifi cation as held for sale date.
Carrying value on November 4, 2009 550,000
Fair value less costs to sell on
December 31, 2009 390,000
Total movement (160,000)
IFRS 5 impairment recognized on (200,000)
November 5, 2009
IAS 39 interest recognized on 30,000
December 31, 2009
IAS 2 impairment on December 31, 2009 (10,000)
IFRS 5 gain recognized on 20,000‡
December 31, 2009
‡ The amount recognizable as a gain is restricted.