IFRS 5 (International Financial Reporting Standard 5)

Non-Current Assets Held for Sale and Discontinued Operations

Discontinuing Operations:

Classification as discontinuing

A discontinued operation is a component of an entity that either has been disposed of or is classified as held for sale, and:

·         Represents a separate major line of business or geographical area of operations

·         Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations or

·         Is a subsidiary acquired exclusively with a view to resale.

Income Statement Presentation

A single amount shall be presented on the face of the income statement comprising the sum of:

·         The post-tax profit or loss of the discontinued operation and

·         The post-tax gain or loss recognized on the measurement to fair value

·         Less cost to sell

·         Less fair value adjustments on the disposal of the assets (or disposal group)

Detailed disclosure is required, either in notes or on the face of the income statement in section distinct from continuing operations, of

·         Revenue

·         Expenses

·         Pre-tax profit or loss and

·         Related income taxes

Cash flow statement presentation

The net cash flows attributable to the operating, investing and financing activities of a discontinued operation(s) shall be separately presented on the face of the cash flow statement or disclosed in the notes.

No retroactive classification

IFRS-5 prohibits the classification of the operations as discontinued if the recognition criteria are met after the reporting date.

Disclosures

In addition to the income statement and cash flow statement presentations noted above, the following disclosures are required:

·         Adjustments made in the current period to amounts disclosed as a discontinued operation in prior periods must be separately disclosed.

·         If an entity ceases to classify a component as held for sale, the results of that component previously presented in discontinued operations must be reclassified and included in income from continuing operations for all prior periods presented.