11-01-2009, 05:59 AM
Dear neva,
My view is that IFRS 5 need to be applied in this scenario. The building should be classified as an Held-for-Sale Asset if it meets the following conditions.
In general, the following conditions must be met for an asset to be classified as held for sale [IFRS 5.6-8]
<ul><li>management is committed to a plan to sell </li><li>the asset is available for immediate sale </li><li>an active programme to locate a buyer is initiated </li> <li>the sale is highly probable, within 12 months of classification as held for sale (subject to limited exceptions)</li> <li>the asset is being actively marketed for sale at a sales price reasonable in relation to its fair value</li><li>actions required to complete the plan indicate that it is unlikely that plan will be significantly changed or withdrawn</li></ul>
Immediately before the initial classification of the asset as held for sale, the carrying amount of the asset will be measured in accordance with applicable IFRSs (IAS 16, in this case). Resulting adjustments are also recognised in accordance with applicable IFRSs. [IFRS 5.18]
After classification as held for sale, Non-current assets or disposal groups that are classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. [IFRS 5.15]
<b>Balance sheet presentation.</b> Assets classified as held for sale, <i><u>must be presented separately on the face of the balance sheet</u></i> (statement of financial position). [IFRS 5.38]
<b>Disclosures [IFRS 5.41]</b>
<ul><li>description of the non-current asset </li><li>description of facts and circumstances of the sale (disposal) and the expected timing </li><li>impairment losses and reversals, if any, and where in the statement of comprehensive income they are recognised </li> <li>if applicable, the reportable segment in which the non-current asset (or disposal group) is presented in accordance with IFRS 8 Operating Segments</li></ul>
http//www.iasplus.com/standard/ifrs05.htm
My view is that IFRS 5 need to be applied in this scenario. The building should be classified as an Held-for-Sale Asset if it meets the following conditions.
In general, the following conditions must be met for an asset to be classified as held for sale [IFRS 5.6-8]
<ul><li>management is committed to a plan to sell </li><li>the asset is available for immediate sale </li><li>an active programme to locate a buyer is initiated </li> <li>the sale is highly probable, within 12 months of classification as held for sale (subject to limited exceptions)</li> <li>the asset is being actively marketed for sale at a sales price reasonable in relation to its fair value</li><li>actions required to complete the plan indicate that it is unlikely that plan will be significantly changed or withdrawn</li></ul>
Immediately before the initial classification of the asset as held for sale, the carrying amount of the asset will be measured in accordance with applicable IFRSs (IAS 16, in this case). Resulting adjustments are also recognised in accordance with applicable IFRSs. [IFRS 5.18]
After classification as held for sale, Non-current assets or disposal groups that are classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. [IFRS 5.15]
<b>Balance sheet presentation.</b> Assets classified as held for sale, <i><u>must be presented separately on the face of the balance sheet</u></i> (statement of financial position). [IFRS 5.38]
<b>Disclosures [IFRS 5.41]</b>
<ul><li>description of the non-current asset </li><li>description of facts and circumstances of the sale (disposal) and the expected timing </li><li>impairment losses and reversals, if any, and where in the statement of comprehensive income they are recognised </li> <li>if applicable, the reportable segment in which the non-current asset (or disposal group) is presented in accordance with IFRS 8 Operating Segments</li></ul>
http//www.iasplus.com/standard/ifrs05.htm
