Topic: Non-current Assets Held for Sale (IFRS 5)

a. IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations set out requirements that specify the accounting treatment for assets held for sale and the presentation and disclosure of discontinued operations.

Required:

1. Explain the conditions that must apply at the reporting date for an asset (or disposal group) to be classified as held for sale and how the assets can be measured.
   (5 Marks)

b.

1. Explain how impairment of asset should be identified and accounted for at the end of a reporting period.
   (4 Marks)
2. A company has decided to dispose of a group of its assets. The carrying amounts of the assets immediately before the classification as held for sale were as follows:
   

   Asset	Amount (₦)
   Goodwill	800,000
   Property, plant and equipment (revalued amounts)	3,050,000
   Property, plant and equipment (at cost)	3,200,000
   Inventory	840,000
   Other current assets	700,000
   Total	8,590,000

   The company estimates that the “fair value less cost to sell” of the disposal group is ₦6,400,000.

   Required:
   Calculate the impairment loss and its allocation to the non-current assets in the disposal group.
   (6 Marks)