- 4 Marks
Question
Atta Kay Ltd has the following assets which it would like to classify under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations today:
| Asset | Carrying Amount (GH¢million) | Open Market Value (GH¢million) | Estimated Selling Costs (GH¢million) |
|---|---|---|---|
| Investment properties (at fair value through profit or loss) | 62.3 | 30.9 | 0.5 |
| Land used as company car park (held under the revaluation model) | 49 | 50.5 | 1.0 |
| Trade Receivables | 28 | 24 | 1.0 |
| Plant (held under the cost model) | 14 | 10 | 0.5 |
Required:
Calculate the carrying amount of assets that can be classified as held for sale (assuming the relevant criteria are met where appropriate), after applying the measurement rules of IFRS 5.
Answer
| Non-current assets held for sale | (GH¢m) |
|---|---|
| Investment properties held at fair value through profit or loss are outside the scope of IFRS 5 | 0 |
| Land (the land is held under the revaluation model and so is first revalued to fair value (50.5) before applying IFRS 5: lower of (revised) carrying amount (49) and fair value less costs to sell (49.5)) | 49.0 |
| Trade receivables – outside scope of IFRS 5 | 0 |
| Plant (lower of carrying amount (14) and fair value less costs to sell (9.5)) | 9.5 |
| Total | 58.5 |
| (4 marks) |
- Tags: Classification of Assets, IFRS 5, Non-current Assets Held for Sale
- Level: Level 2
- Uploader: Uploader1