FR-Ch-5 (Non-Current assets held for sale and discontinued )

For an asset to be classified as 'held for sale' under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations its sale must be 'highly probable'. Which of the following is NOT a requirement if the sale is to be regarded as highly probable?

• Management must be committed to a plan to sell the asset.

• A buyer must have been located for the asset.

• The asset must be marketed at a reasonable price.

• The sale should be expected to take place within one year from the date of classification.

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations prescribes the recognition criteria for non-current assets held for sale. For an asset or a disposal group to be classified as held for sale, the sale must be highly probable. Which of the following must apply for the sale to be considered highly probable?
(1) A buyer must have been located
(2) The asset must be marketed at a reasonable price
(3) Management must be committed to a plan to sell the asset
(4) The sale must be expected to take place within the next six months

• (2) and (3)

• (3) and (4)

• (1) and (4)

• (1) and (2)

What is the profit or loss on discontinued operations relating to property, plant and equipment for the year ended 30 September 20X3?

• $1.75 million loss

• $1.75 million profit

• $550,000 loss

• $550,000 profit

In accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, what is the carrying amount of the plant in Maykorn Co's statement of financial position as at 30 September 20X3?

• $420,000

• $470,000

• $455,000

• $465,000

As at 30 September 20x3 Dune Co's property in its statement of financial position was :

Property at cost ( useful life 15 year) $45 Million

Accumulated depreciation $6 million
On 1 April 20X4, Dune Co decided to sell the property. The property is being marketed by a property agent at a price of $42 million, which was considered a reasonably achievable price at that date. The expected costs to sell have been agreed at $1 million. Recent market transactions suggest that actual selling prices achieved for this type of property in the current market conditions are 10% less than the price at which they are marketed.

At 30 September 20X4 the property has not been sold.

At what amount should the property be reported in Dune Co's statement of financial position as at 30 September 20X4?

• $41 million

• $37.8 million

• $36.8 million

• $42 million

Coppola Co has a factory with a carrying amount of $1.8 million as at 30 November 20X6. Management have agreed the sale of the factory to Francis Co, which is due to complete on 14 January 20X7. The sales contract was agreed and the decision to sell the factory announced on 1 December 20X6. Relevant information relating to the factory, which is correct both at 1 December 20X6 and 31 December 20X6 is as follows:

Fair value: $2.4 million

Value in use: $2.2 million

Costs to sell: $0.3 million

Depreciation for the factory in December 20X6 is calculated to be $0.2 million.

What is the carrying amount of the factory for inclusion in the financial statements of Coppola Co as at 31 December 20X6?

• $1.6 million

• $1.8 million

• $1.9 million

• $2.1 million

Maitlis Co prepares its financial statements to 31 October each year. On 1 February 20X5, Maitlis Co met the criteria to classify its bakery division, a major line of business, as held for sale. It recognised a loss of $45,000 on that classification. Maitlis Co completed the disposal of the bakery division on 31 October 20X5. The carrying amount of the net assets of the bakery were $612,000 on the date of sale and Maitlis Co received proceeds of $700,000 on completion of the sale. The bakery made a loss of $34,000 in the period to 31 October 20X5. You can ignore the effects of taxation.
Required :-
What is the total amount of profit or loss on discontinued operations that should be presented on the face of the statement of profit or loss and other comprehensive income?

• $43,000 Loss
  $9,000 Profit

• $9,000 Profit
  $43,000 Loss

• $34,000 Loss
  $43,000 Loss

• $88,000 Profit
  $34,000 Loss