PFRS 5
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PFRS 5 covers: 1. The classification, measurement and presentation of
assets ‘held for sale’ 2. The classification and presentation of discontinued
operations 3. The impairment of long-lived assets to be held and used
A. 1 and 3 only
B. 2 and 3 only
C. 1, 2 and 3 all
D. 1 and 2 only
Step by step
Solved in 2 steps
- The following statements are based on PFRS 5 – “Non-current Assets Held for Sale and Discontinued Operations”: Statement 1: An entity shall classify a non-current asset or disposal group as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. Statement 2: An extension of the period required to complete a sale does not preclude an asset or disposal group from being classified as held for sale if the delay is caused by events or circumstances beyond the entity’s control and there is sufficient evidence that the entity remains committed to its plan to sell the asset (or disposal group). Statement 3: An entity shall measure a non-current asset or disposal group classified as held for sale at the lower of its carrying amount and fair value less costs to sell. A. Only statement 1 is false C. Only statement 3 is true B. Only statement 2 is false D. All of the statements are trueAccording to PFRS 5, held for sale classification is permitted when a. the non current asset or disposal group is available for immediate sale in its present condition b. the sale is highly probable C. a and b d. the sale actually occurred after the reporting period but before the financial statements were authorized for issueBriefly outline the accounting treatment of Non-Current Assets Held for Sale according to IFRS 5-Non Current Assets Held for Sale and Discontinued Operations.
- ( Appendix 7A) Impairment Listed below is information related to three assets reported in the financial statements of Grant Company: Required: For each scenario, indicate whether the asset has been impaired and, if so, the amount of the impairment loss that should recorded.Which of the following statements are correct? I. IAS 16 Property, plant and equipment requires entities to disclose the purchase date of each asset II. The carrying amount of a non-current asset is the cost or valuation of that asset less accumulated depreciation III. IAS 16 Property, plant and equipment permits entities to make a transfer from the revaluation surplus to retained earnings for excess depreciation on revalue assets IV. Once decided, the useful life of a non-current asset should not be changed1.) PFRS 5 covers: 1. The classification, measurement and presentation of assets ‘held for sale’ 2. The classification and presentation of discontinued operations 3. The impairment of long-lived assets to be held and used A. 1 and 3 only B. 2 and 3 only C. 1, 2 and 3 all D. 1 and 2 only 2.) A disposal group, which was part of a cash-generating unit: A. Becomes a non-current asset B. Is ignored C. Becomes a separate cash-generating unit D. I don’t know 3.) If the criteria are met after the end of reporting period, an undertaking shall: A. classify a non-current asset as ‘discontinued operations’ in those financial statements B. When those criteria are met, after the end of reporting period, but before the approval of the financial statements for issue, the undertaking shall disclose the information in the notes C. Classify a non-current asset as ‘held for sale’ in those financial statements D. It depends
- The FASB Accounting Standards Codification represents the single source of authoritative U.S. generally accepted accounting principles. Required: 1. Obtain the relevant authoritative literature on the impairment or disposal of long-lived assets using the FASB Accounting Standards Codification at the FASB website (asc.fasb.org). Indicate the Codification topic number that provides guidance on accounting for the impairment of long-lived assets. 2. What is the specific citation that discusses the disclosures required in the notes to the financial statements for the impairment of long-lived assets classified as held and used? 3. Describe the disclosure requirements.Which of the following must be recorded in the accounting records when an asset that is NOT held for sale is derecognized? A Removal of the asset. B Gain or loss on derecognition. C All of the above items must be recorded in the accounting records. D Depreciation up until the date of derecognition.Topic: Non-Current Assets Held for Sale and Discontinued Operations 15. Which of the following shall be recognized by the entity in its 20x3 financial statements? Held for ale asset Impairment loss a. P1,100,000 P450,000 b. P1,000,000 P350,000 c. P750,000 P250,000 d. P0 P350,000 16. Requirement: Provide the journal entry on December 31, 20x3.
- PFRS 5 provides unconditional requirement that the sale of the noncurrent asset held for sale should be expected to qualify for recognitionas a completed sale within one year from the date of classification. A. TrueB. FalseC. SecretD. I dunno8. The profit or loss section or the statement of profit or loss shall include the following line items, excepta. Gains and losses on distribution of non-cash assets to owners.b. Revenue, presenting separately interest revenue calculated using the effective interest methodc. A single amount for the total of discontinuedoperationsd. Impairment losses (including reversals of impairment losses or impairment gains) determined in accordance with PAS 36. 9. In accordance with PAS 1, the profit or loss section or the statement of profit or loss shall include line item for gains and losses from derecognition ofa. Financial assets measured at fair value through profit or loss.b. Financial assets measured at fair value through other comprehensive income.c. Financial assets measured at amortized cost. d. All of these.Ma1. d) In accordance with IAS 36: Impairment of Assets, an entity shall assess at the end of each reporting period whether there is any indication that an asset may be impaired. If any of such indications exist, the entity shall estimate the recoverable amount of the asset. However, some assets would require mandatory testing for impairment. Required: Outline assets that require mandatory testing for impairment in accordance with IAS 36: Impairment of Assets.