IFRS PRACTICAL IMPLEMENTATION GUIDE AND WORKBOOK

Chapter 37/ Noncurrent Assets Heldfor Sale and Discontinued Operations (lFRS 5)

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(d) Recognize the noncurrent asset at its carry– ing amount prior to its classification as held for sale as adjusted for subsequent deprecia– tion. amortization. or revaluations. Answer: (c) 9. Which of the following criteria do not have to be met in order for an operation to be classified as dis– continued? (a) The operation should represent a separate line of business or geographical area. (b) The operation is part of a single plan to dis– pose of a separate major line of business or geographical area. (c) The operation is a subsidiary acquired exclu– sively with a view to resale. (d) The operation must be sold within three months of the year-end . Answer: (d) 10. IFRS 5 states that a noncurrent asset that is to be abandoned should not be classified as held for sale. The reason for this is because (a) Its carrying amount will be recovered princi– pally through continuing use. (b) It is difficult to value. (c) It is unlikely that the noncurrent asset will be sold within 12 months. (d) It is unlikely that there will be an active market for the noncurrent asset. Answer: (a)