Thursday, April 24, 2014

Presentation of Asset Held For Sale - something interesting to note

Today, the founders of accounting and auditing blog learn something "new" today. We were reading through annual report of a listed entity, who had recorded asset held for sale as at year-end.

As you maybe aware,

" .....An entity shall present a non-current asset classified as held for sale and the assets of a disposal group classified as held for sale separately from other assets in the statement of financial position. The liabilities of a disposal group classified as held for sale shall be presented separately from other liabilities in the statement of financial position. Those assets and liabilities shall not be offset and presented as a single amount. "

Just to emphasize that asset held for sale should be presented as gross asset and gross liabilities with no offset. To illustrate, if a Group has decided to dispose an entity and management has assessed it meets the criteria of asset held for sale - its asset and liabilities should be presented at gross on asset and liabilities seprately.

The other new element we learned about today is regarding the following

" An entity shall present separately any cumulative income or expense recognised in other comprehensive income relating to a non-current asset (or disposal group) classified as held for sale. "

In this juncture, items gone through other comprehensive income should be presented as reserve of disposal group. For instance, asset revaluation reserve of disposal group should be presented on the balance sheet.

This is not new but not many readers are aware of this - hence, we would like to share this you.

Please feel free contact us if you need any clarification -

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