Comparison between U.S. GAAP and International ... - Grant Thornton
Comparison between U.S. GAAP and International ... - Grant Thornton
Comparison between U.S. GAAP and International ... - Grant Thornton
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<strong>Comparison</strong> <strong>between</strong> U.S. <strong>GAAP</strong> <strong>and</strong> <strong>International</strong> Financial Reporting St<strong>and</strong>ards 25<br />
IFRS<br />
For this to be the case the non-current asset (disposal group) must be available for immediate sale<br />
in its present condition subject only to terms that are usual <strong>and</strong> customary for sales of such assets<br />
(disposal groups) <strong>and</strong> its sale must be highly probable (IFRS 5.7).<br />
For the sale to be highly probable (IFRS 5.8)<br />
• The appropriate level of management must be committed to a plan to sell the asset (disposal<br />
group)<br />
• An active programme to locate a buyer <strong>and</strong> complete the plan must have been initiated<br />
• The asset (disposal group) must be actively marketed for sale at a price that is reasonable in<br />
relation to its current fair value<br />
• The sale should be expected to qualify for recognition as a completed sale within one year<br />
from the date of classification (the one year limit is extended if conditions in IFRS 5, Appendix<br />
B apply)<br />
• Actions required to complete the plan should indicate that it is unlikely that significant changes<br />
to the plan will be made or that it will be withdrawn<br />
The probability of shareholders’ approval (if required in the jurisdiction) should be considered as<br />
part of the assessment of whether the sale is highly probable (IFRS 5.8).<br />
An entity that is committed to a sale plan involving loss of control of a subsidiary shall classify all<br />
the assets <strong>and</strong> liabilities of that subsidiary as held for sale when the criteria in IFRS 5.6-.8 are met,<br />
regardless of whether the entity will retain a non-controlling interest in its former subsidiary after<br />
the sale (IFRS 5.8A).<br />
U.S. <strong>GAAP</strong><br />
(see below) that<br />
demonstrate<br />
that the entity is<br />
sufficiently<br />
committed to a<br />
plan to sell<br />
(ASC 360-10-<br />
45-9 through<br />
45-14).<br />
A long-lived<br />
asset (disposal<br />
group) to be<br />
sold shall be<br />
classified as<br />
held for sale in<br />
the period in<br />
which all of the<br />
following criteria<br />
are met (ASC<br />
360-10-45-9):<br />
• Manageme<br />
nt, having<br />
the<br />
authority to<br />
approve<br />
the action,<br />
commits to<br />
a plan to<br />
sell the<br />
asset<br />
(disposal<br />
group)<br />
• The asset<br />
(disposal<br />
group) is<br />
available<br />
for<br />
immediate<br />
sale in its<br />
present<br />
condition<br />
subject<br />
only to<br />
terms that<br />
are usual<br />
<strong>and</strong><br />
customary<br />
for sales of<br />
such<br />
assets<br />
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All rights reserved<br />
U.S. member firm of <strong>Grant</strong> <strong>Thornton</strong> <strong>International</strong> Ltd
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