Non-current Assets Held for Sale and Discontinued Operations

This compiled Standard applies to annual reporting periods beginning on or after 1 January 2018.  Early application is permitted for annual reporting periods beginning on or after 24 July 2014 but before 1 January 2018.  It incorporates relevant amendments made up to and including 21 January 2015.

Prepared on 20 March 2015 by the staff of the Australian Accounting Standards Board.

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COPYRIGHT

© 2015 Commonwealth of Australia

This compiled AASB Standard contains IFRS Foundation copyright material.  Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source.  Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to The Director of Finance and Administration, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007.

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CONTENTS

COMPILATION DETAILS

Comparison With IFRS 5

Accounting Standard

AASB 5 Non-current Assets Held for Sale and Discontinued Operations

  Paragraphs

Objective  1

Application  Aus1.1 – Aus1.7

Reduced disclosure requirements  Aus1.9 – Aus1.10

Scope  2 – 5B

Classification of Non-current Assets (or Disposal Groups) as Held for Sale or as Held
for Distribution to Owners  6 – 12A

Non-current assets that are to be abandoned  13 – 14

Measurement of Non-current Assets (or Disposal Groups) Classified as Held for Sale 

Measurement of a non-current asset (or disposal group)  15 – 19

Recognition of impairment losses and reversals  20 – 25

Changes to a plan of sale or to a plan of distribution to owners  26 – 29

Presentation and Disclosure  30

Presenting discontinued operations  31 – 36A

Gains or losses relating to continuing operations  37

Presentation of a non-current asset or disposal group classified as held for sale 38 – 40

Additional disclosures  41 – 42

Transitional Provisions  Aus42.1 – 43

Effective Date  Aus44B.1 – 44L

Appendices:

A.  Defined Terms  Page 16

B.  Application Supplement  Page 17

DELETED IFRS 5 TEXT  Page 18

IMPLEMENTATION GUIDANCE ON IFRS 5
(available on the AASB website)

BASIS FOR CONCLUSIONS ON IFRS 5
(available on the AASB website)

Australian Accounting Standard AASB 5 Non-current Assets Held for Sale and Discontinued Operations (as amended) is set out in paragraphs 1 – 44L and Appendices A – B.  All the paragraphs have equal authority.  Paragraphs in bold type state the main principles.  Terms defined in this Standard are in italics the first time they appear in the Standard.  AASB 5 is to be read in the context of other Australian Accounting Standards, including AASB 1048 Interpretation of Standards, which identifies the Australian Accounting Interpretations.  In the absence of explicit guidance, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies.

compilation details

Accounting Standard AASB 5 Non-current Assets Held for Sale and Discontinued Operations as amended

This compiled Standard applies to annual reporting periods beginning on or after 1 January 2018.  It takes into account amendments up to and including 21 January 2015 and was prepared on 20 March 2015 by the staff of the Australian Accounting Standards Board (AASB).

This compilation is not a separate Accounting Standard made by the AASB.  Instead, it is a representation of AASB 5 (July 2004) as amended by other Accounting Standards, which are listed in the Table below.

Table of Standards

(a) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009, provided that AASB 8 Operating Segments is also applied to such periods.

(b) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 July 2007. 

(c) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009, provided that AASB 101 Presentation of Financial Statements (September 2007) is also applied to such periods.

(d) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 July 2008, provided that the Standards and Interpretation listed in paragraph 6 of AASB 2007-9 are also applied to such periods.

(e) Entities may elect to apply this Standard to annual reporting periods beginning on or after 30 June 2007 but before 1 July 2009, provided that AASB 3 Business Combinations (March 2008) and AASB 127 Consolidated and Separate Financial Statements (March 2008) are also applied to such periods.

(f) Paragraph 11 of this Standard specifies application provisions.  Entities may elect to apply this Standard, or its amendments to individual Standards, to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009.

(g) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 July 2009, provided that AASB 127 Consolidated and Separate Financial Statements (March 2008) is also applied to such periods.

(h) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 July 2009, provided that AASB Interpretation 17 Distributions of Non-cash Assets to Owners is also applied to such periods.

(i) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2010.

(j) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009, provided that AASB 101 Presentation of Financial Statements (September 2007) is also applied to such periods, and to annual reporting periods beginning on or after 1 January 2009 that end before 30 June 2009.

(k) Entities may elect to apply this Standard to annual reporting periods beginning before 1 July 2009 that end on or after 1 July 2008.

(l) AASB 2009-11 has been amended by AASB 2010-10 (made 31 December 2010) and AASB 2012-6 (made 10 September 2012).  Part E of AASB 2014-1 (made 4 June 2014) updated the application date of the amendments in this Standard to 1 January 2018.

 Entities may elect to apply the amendments in this Standard to annual reporting periods ending on or after 31 December 2009 that begin before 1 January 2018, provided that AASB 9 (2009) Financial Instruments is also applied to such periods.

(m) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2011.

(n) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 July 2009 but before 1 July 2013, provided that AASB 1053 Application of Tiers of Australian Accounting Standards is also applied to such periods.

(o) AASB 2010-7 has been amended by AASB 2010-10 (made 31 December 2010) and AASB 2012-6 (made 10 September 2012).  Part E of AASB 2014-1 (made 4 June 2014) updated the application date of the amendments in this Standard to 1 January 2018.

 Entities may elect to apply the amendments in this Standard as set out in paragraph 6 of AASB 2010-7.

(p) Entities may elect to apply this Standard, or its amendments to individual pronouncements, to annual reporting periods beginning on or after 1 January 2005 but before 1 July 2011, provided that AASB 1054 Australian Additional Disclosures is, or its relevant individual disclosure requirements are, also applied to such periods.

(q) AASB 2011-7 has been amended by AASB 2012-6 (made 10 September 2012) and AASB 2012-10 (made 18 December 2012).

 For-profit entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013.  The Standard applies for not-for-profit entities to annual reporting periods beginning on or after 1 January 2014.  Not-for-profit entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2013 but before 1 January 2014.  If an entity elects to apply this Standard to such annual reporting periods, it shall also apply AASB 10 Consolidated Financial Statements and associated Standards to such periods.

(r) AASB 2011-8 has been amended by AASB 2011-10 (made 5 September 2011) and AASB 2012-6 (made 10 September 2012).

 Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013, provided that AASB 13 Fair Value Measurement is also applied to such periods.

(s) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 July 2012.

(t) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013.

(u) Early application of Part B of this Standard is not permitted.

(v) Entities may elect to apply Part E of this Standard to annual reporting periods ending on or after 31 December 2009 that begin before 1 January 2018, provided that AASB 9 Financial Instruments (2009) or AASB 9 Financial Instruments (2010) is also applied to such periods.

(w) Entities may elect to apply this Standard to annual reporting periods beginning on or after 24 July 2014 but before 1 January 2018, provided that AASB 9 Financial Instruments (2014) is also applied to such periods.

(x) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2016.

Table of Amendments

Comparison with IFRS 5

AASB 5 and IFRS 5

AASB 5 Non-current Assets Held for Sale and Discontinued Operations as amended incorporates IFRS 5 Non-current Assets Held for Sale and Discontinued Operations as issued and amended by the International Accounting Standards Board (IASB).  Paragraphs that have been added to this Standard (and do not appear in the text of IFRS 5) are identified with the prefix “Aus”, followed by the number of the preceding IASB paragraph and decimal numbering.

Compliance with IFRS 5

Entities that comply with AASB 5 as amended will simultaneously be in compliance with IFRS 5 as amended, except for government-controlled entities that restructure administrative arrangements or administered activities and entities preparing general purpose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements.

aCCOUNTING STANDARD AASB 5

Non-current Assets Held for Sale and Discontinued Operations

Objective

1 The objective of this Standard is to specify the accounting for assets held for sale, and the presentation and disclosure of discontinued operations.  In particular, the Standard requires:

(a) assets that meet the criteria to be classified as held for sale to be measured at the lower of carrying amount and fair value less costs to sell, and depreciation on such assets to cease; and

(b) assets that meet the criteria to be classified as held for sale to be presented separately in the statement of financial position and the results of discontinued operations to be presented separately in the statement of comprehensive income.

Application

Aus1.1 This Standard applies to:

(a) each entity that is required to prepare financial reports in accordance with Part 2M.3 of the Corporations Act and that is a reporting entity;

(b) general purpose financial statements of each other reporting entity; and

(c) financial statements that are, or are held out to be, general purpose financial statements.

Aus1.2 This Standard applies to annual reporting periods beginning on or after 1 January 2005.
[Note:  For application dates of paragraphs changed or added by an amending Standard, see Compilation Details.]

Aus1.3 This Standard shall not be applied to annual reporting periods beginning before 1 January 2005.

Aus1.4 [Deleted by the AASB]

Aus1.5 When applicable, this Standard supersedes AASB 1042 Discontinuing Operations as notified in the Commonwealth of Australia Gazette No S 456, 22 August 2000.

Aus1.6 AASB 1042 remains applicable until superseded by this Standard.

Aus1.7 Notice of this Standard was published in the Commonwealth of Australia Gazette No S 294, 22 July 2004.

Reduced disclosure requirements

Aus1.9 The following do not apply to entities preparing general purpose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements:

(a) paragraphs 33(b), 33(d), 41(d) and 42; and

(b) the second and third sentence in paragraph 35, including paragraphs 35(a)-(c).

Entities applying Australian Accounting Standards – Reduced Disclosure Requirements may elect to comply with some or all of these excluded requirements.

Aus1.10 The requirements that do not apply to entities preparing general purpose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements are identified in this Standard by shading of the relevant text.

Scope

2 The classification and presentation requirements of this Standard apply to all recognised non-current assets[1] and to all disposal groups of an entity.  The measurement requirements of this Standard apply to all recognised non‑current assets and disposal groups (as set out in paragraph 4), except for those assets listed in paragraph 5 which shall continue to be measured in accordance with the Standard noted.

Aus2.1 The requirements in this Standard do not apply to:

(a) the restructuring of administrative arrangements; and

(b) the restructuring of administered activities of government departments.

Aus2.2 AASB 1004 Contributions includes requirements for the disclosure of assets, liabilities and items of equity resulting from the restructuring of administrative arrangements.

Aus2.3 An administered activity of a government department does not give rise to income and expenses of the department reporting the administered activity (see AASB 1050 Administered Items) and therefore, from the point of view of the department, the discontinuance of an administered activity does not give rise to a discontinued operation.  However, if a government were to discontinue an activity that one of its departments had disclosed as an administered activity, from the point of view of that government the discontinuance may constitute a discontinued operation.

Aus2.4 Although AASB 3 Business Combinations contains requirements relating to the restructuring of local governments, these requirements only apply to the local government receiving assets or liabilities as a result of the restructuring.  This Standard applies to the local government transferring assets and liabilities where the restructuring results in a discontinued operation of the transferor local government. 

3 Assets classified as non-current in accordance with AASB 101 Presentation of Financial Statements shall not be reclassified as current assets until they meet the criteria to be classified as held for sale in accordance with this Standard.  Assets of a class that an entity would normally regard as non-current that are acquired exclusively with a view to resale shall not be classified as current unless they meet the criteria to be classified as held for sale in accordance with this Standard.

4 Sometimes an entity disposes of a group of assets, possibly with some directly associated liabilities, together in a single transaction.  Such a disposal group may be a group of cash-generating units, a single cash‑generating unit, or part of a cash-generating unit[2].  The group may include any assets and any liabilities of the entity, including current assets, current liabilities and assets excluded by paragraph 5 from the measurement requirements of this Standard.  If a non-current asset within the scope of the measurement requirements of this Standard is part of a disposal group, the measurement requirements of this Standard apply to the group as a whole, so that the group is measured at the lower of its carrying amount and fair value less costs to sell.  The requirements for measuring the individual assets and liabilities within the disposal group are set out in paragraphs 18, 19 and 23.

5 The measurement provisions of this Standard[3] do not apply to the following assets, which are covered by the Australian Accounting Standards listed, either as individual assets or as part of a disposal group:

(a) deferred tax assets (AASB 112 Income Taxes);

(b) assets arising from employee benefits (AASB 119 Employee Benefits);

(c) financial assets within the scope of AASB 9 Financial Instruments;

(d) non-current assets that are accounted for in accordance with the fair value model in AASB 140 Investment Property;

(e) non-current assets that are measured at fair value less costs to sell in accordance with AASB 141 Agriculture; and

(f) contractual rights under insurance contracts as defined in AASB 4 Insurance Contracts.

5A The classification, presentation and measurement requirements in this Standard applicable to a non-current asset (or disposal group) that is classified as held for sale apply also to a non-current asset (or disposal group) that is classified as held for distribution to owners acting in their capacity as owners (held for distribution to owners).

5B This Standard specifies the disclosures required in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations.  Disclosures in other Standards do not apply to such assets (or disposal groups) unless those Standards require:

(a) specific disclosures in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations; or

(b) disclosures about measurement of assets and liabilities within a disposal group that are not within the scope of the measurement requirement of AASB 5 and such disclosures are not already provided in the other notes to the financial statements.

 Additional disclosures about non-current assets (or disposal groups) classified as held for sale or discontinued operations may be necessary to comply with the general requirements of AASB 101, in particular paragraphs 15 and 125 of that Standard.

Classification of Non-current Assets (or Disposal Groups) as Held for Sale or as Held for Distribution to Owners

6 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.

7 For this to be the case, the asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups) and its sale must be highly probable.

8 For the sale to be highly probable, the appropriate level of management must be committed to a plan to sell the asset (or disposal group), and an active program to locate a buyer and complete the plan must have been initiated.  Further, the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value.  In addition, the sale should be expected to qualify for recognition as a completed sale within one year from the date of classification, except as permitted by paragraph 9, and actions required to complete the plan should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.  The probability of shareholders’ approval (if required in the jurisdiction) should be considered as part of the assessment of whether the sale is highly probable.

8A An entity that is committed to a sale plan involving loss of control of a subsidiary shall classify all the assets and liabilities of that subsidiary as held for sale when the criteria set out in paragraphs 6-8 are met, regardless of whether the entity will retain a non-controlling interest in its former subsidiary after the sale.

9 Events or circumstances may extend the period to complete the sale beyond one year.  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).  This will be the case when the criteria in Appendix B are met.

10 Sale transactions include exchanges of non-current assets for other non‑current assets when the exchange has commercial substance in accordance with AASB 116 Property, Plant and Equipment.

11 When an entity acquires a non-current asset (or disposal group) exclusively with a view to its subsequent disposal, it shall classify the non-current asset (or disposal group) as held for sale at the acquisition date only if the one‑year requirement in paragraph 8 is met (except as permitted by paragraph 9) and it is highly probable that any other criteria in paragraphs 7 and 8 that are not met at that date will be met within a short period following the acquisition (usually within three months).

12 If the criteria in paragraphs 7 and 8 are met after the reporting period, an entity shall not classify a non-current asset (or disposal group) as held for sale in those financial statements when issued.  However, when those criteria are met after the reporting period but before the authorisation of the financial statements for issue, the entity shall disclose the information specified in paragraph 41(a), (b) and (d) in the notes.

12A A non-current asset (or disposal group) is classified as held for distribution to owners when the entity is committed to distribute the asset (or disposal group) to the owners.  For this to be the case, the assets must be available for immediate distribution in their present condition and the distribution must be highly probable.  For the distribution to be highly probable, actions to complete the distribution must have been initiated and should be expected to be completed within one year from the date of classification.  Actions required to complete the distribution should indicate that it is unlikely that significant changes to the distribution will be made or that the distribution will be withdrawn.  The probability of shareholders’ approval (if required in the jurisdiction) should be considered as part of the assessment of whether the distribution is highly probable.

Non-current assets that are to be abandoned

13 An entity shall not classify as held for sale a non-current asset (or disposal group) that is to be abandoned.  This is because its carrying amount will be recovered principally through continuing use.  However, if the disposal group to be abandoned meets the criteria in paragraph 32(a)-(c), the entity shall present the results and cash flows of the disposal group as discontinued operations in accordance with paragraphs 33 and 34 at the date on which it ceases to be used.  Non‑current assets (or disposal groups) to be abandoned include non‑current assets (or disposal groups) that are to be used to the end of their economic life and non-current assets (or disposal groups) that are to be closed rather than sold.

14 An entity shall not account for a non-current asset that has been temporarily taken out of use as if it had been abandoned.

Measurement of Non-current Assets (or Disposal Groups) Classified as Held for Sale

Measurement of a non-current asset (or disposal group)

15 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.

15A An entity shall measure a non-current asset (or disposal group) classified as held for distribution to owners at the lower of its carrying amount and fair value less costs to distribute[4].

16 If a newly acquired asset (or disposal group) meets the criteria to be classified as held for sale (see paragraph 11), applying paragraph 15 will result in the asset (or disposal group) being measured on initial recognition at the lower of its carrying amount had it not been so classified (for example, cost) and fair value less costs to sell.  Hence, if the asset (or disposal group) is acquired as part of a business combination, it shall be measured at fair value less costs to sell.

17 When the sale is expected to occur beyond one year, the entity shall measure the costs to sell at their present value.  Any increase in the present value of the costs to sell that arises from the passage of time shall be presented in profit or loss as a financing cost.

18 Immediately before the initial classification of the asset (or disposal group) as held for sale, the carrying amounts of the asset (or all the assets and liabilities in the group) shall be measured in accordance with applicable Australian Accounting Standards.

19 On subsequent remeasurement of a disposal group, the carrying amounts of any assets and liabilities that are not within the scope of the measurement requirements of this Standard, but are included in a disposal group classified as held for sale, shall be remeasured in accordance with applicable Australian Accounting Standards before the fair value less costs to sell of the disposal group is remeasured.

Recognition of impairment losses and reversals

20 An entity shall recognise an impairment loss for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell, to the extent that it has not been recognised in accordance with paragraph 19.

21 An entity shall recognise a gain for any subsequent increase in fair value less costs to sell of an asset, but not in excess of the cumulative impairment loss that has been recognised either in accordance with this Standard or previously in accordance with AASB 136 Impairment of Assets.

22 An entity shall recognise a gain for any subsequent increase in fair value less costs to sell of a disposal group:

(a) to the extent that it has not been recognised in accordance with paragraph 19; but

(b) not in excess of the cumulative impairment loss that has been recognised, either in accordance with this Standard or previously in accordance with AASB 136, on the non‑current assets that are within the scope of the measurement requirements of this Standard.

23 The impairment loss (or any subsequent gain) recognised for a disposal group shall reduce (or increase) the carrying amount of the non-current assets in the group that are within the scope of the measurement requirements of this Standard, in the order of allocation set out in paragraphs 104(a) and (b) and 122 of AASB 136.

24 A gain or loss not previously recognised by the date of the sale of a non‑current asset (or disposal group) shall be recognised at the date of derecognition.  Requirements relating to derecognition are set out in:

(a) paragraphs 67-72 of AASB 116 for property, plant and equipment; and

(b) paragraphs 112-117 of AASB 138 Intangible Assets for intangible assets.

25 An entity shall not depreciate (or amortise) a non-current asset while it is classified as held for sale or while it is part of a disposal group classified as held for sale.  Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale shall continue to be recognised.

Changes to a plan of sale or to a plan of distribution to owners

26 If an entity has classified an asset (or disposal group) as held for sale or as held for distribution to owners, but the criteria in paragraphs 7–9 (for held for sale) or in paragraph 12A (for held for distribution to owners) are no longer met, the entity shall cease to classify the asset (or disposal group) as held for sale or held for distribution to owners (respectively).  In such cases an entity shall follow the guidance in paragraphs 27–29 to account for this change except when paragraph 26A applies.

26A If an entity reclassifies an asset (or disposal group) directly from being held for sale to being held for distribution to owners, or directly from being held for distribution to owners to being held for sale, then the change in classification is considered a continuation of the original plan of disposal.  The entity:

(a) shall not follow the guidance in paragraphs 27-29 to account for this change.  The entity shall apply the classification, presentation and measurement requirements in this Standard that are applicable to the new method of disposal.

(b) shall measure the non-current asset (or disposal group) by following the requirements in paragraph 15 (if reclassified as held for sale) or 15A (if reclassified as held for distribution to owners) and recognise any reduction or increase in the fair value less costs to sell/costs to distribute of the non-current asset (or disposal group) by following the requirements in paragraphs 20-25.

(c) shall not change the date of classification in accordance with paragraphs 8 and 12A.  This does not preclude an extension of the period required to complete a sale or a distribution to owners if the conditions in paragraph 9 are met.

27 The entity shall measure a non-current asset (or disposal group) that ceases to be classified as held for sale or as held for distribution to owners (or ceases to be included in a disposal group classified as held for sale or as held for distribution to owners) at the lower of:

(a) its carrying amount before the asset (or disposal group) was classified as held for sale or as held for distribution to owners, adjusted for any depreciation, amortisation or revaluations that would have been recognised had the asset (or disposal group) not been classified as held for sale or as held for distribution to owners, and

(b) its recoverable amount at the date of the subsequent decision not to sell or distribute.[5]

28 The entity shall include any required adjustment to the carrying amount of a non-current asset that ceases to be classified as held for sale or as held for distribution to owners in profit or loss[6] from continuing operations in the period in which the criteria in paragraphs 7-9 or 12A, respectively, are no longer met.  Financial statements for the periods since classification as held for sale or as held for distribution to owners shall be amended accordingly if the disposal group or non-current asset that ceases to be classified as held for sale or as held for distribution to owners is a subsidiary, joint operation, joint venture, associate, or a portion of an interest in a joint venture or an associate.  The entity shall present that adjustment in the same caption in the statement of comprehensive income used to present a gain or loss, if any, recognised in accordance with paragraph 37.

29 If an entity removes an individual asset or liability from a disposal group classified as held for sale, the remaining assets and liabilities of the disposal group to be sold shall continue to be measured as a group only if the group meets the criteria in paragraphs 7-9.  If an entity removes an individual asset or liability from a disposal group classified as held for distribution to owners, the remaining assets and liabilities of the disposal group to be distributed shall continue to be measured as a group only if the group meets the criteria in paragraph 12A.  Otherwise, the remaining non-current assets of the group that individually meet the criteria to be classified as held for sale (or as held for distribution to owners) shall be measured individually at the lower of their carrying amounts and fair values less costs to sell (or costs to distribute) at that date.  Any non-current assets that do not meet the criteria for held for sale shall cease to be classified as held for sale in accordance with paragraph 26.  Any non-current assets that do not meet the criteria for held for distribution to owners shall cease to be classified as held for distribution to owners in accordance with paragraph 26.

Presentation and Disclosure

30 An entity shall present and disclose information that enables users of the financial statements to evaluate the financial effects of discontinued operations and disposals of non-current assets (or disposal groups).

Presenting discontinued operations

31 A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity.  In other words, a component of an entity will have been a cash‑generating unit or a group of cash‑generating units while being held for use.

32 A discontinued operation is a component of an entity that either has been disposed of, or is classified as held for sale, and:

(a) represents a separate major line of business or geographical area of operations;

(b) is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or

(c) is a subsidiary acquired exclusively with a view to resale.

33 An entity shall disclose:

(a) a single amount in the statement of comprehensive income comprising the total of:

(i) the post-tax profit or loss of discontinued operations; and

(ii) the post-tax gain or loss recognised on the measurement to fair value less costs to sell or on the disposal of the assets or disposal group(s) constituting the discontinued operation;

The analysis may be presented in the notes or in the statement of comprehensive income.  If it is presented in the statement of comprehensive income it shall be presented in a section identified as relating to discontinued operations, ie separately from continuing operations.  The analysis is not required for disposal groups that are newly acquired subsidiaries that meet the criteria to be classified as held for sale on acquisition (see paragraph 11).

(c) the net cash flows attributable to the operating, investing and financing activities of discontinued operations.  These disclosures may be presented either in the notes or in the financial statements.  These disclosures are not required for disposal groups that are newly acquired subsidiaries that meet the criteria to be classified as held for sale on acquisition (see paragraph 11).

33A If an entity presents the items of profit or loss in a separate statement as described in paragraph 10A of AASB 101 (as amended in 2011), a section identified as relating to discontinued operations is presented in that statement.

34 An entity shall re-present the disclosures in paragraph 33 for prior periods presented in the financial statements so that the disclosures relate to all operations that have been discontinued by the end of the reporting period for the latest period presented.

35 Adjustments in the current period to amounts previously presented in discontinued operations that are directly related to the disposal of a discontinued operation in a prior period shall be classified separately in discontinued operations.  The nature and amount of such adjustments shall be disclosed.  Examples of circumstances in which these adjustments may arise include the following:

36 If an entity ceases to classify a component of an entity as held for sale, the results of operations of the component previously presented in discontinued operations in accordance with paragraphs 33-35 shall be reclassified and included in income from continuing operations for all periods presented.  The amounts for prior periods shall be described as having been re-presented.

36A An entity that is committed to a sale plan involving loss of control of a subsidiary shall disclose the information required in paragraphs 33-36 when the subsidiary is a disposal group that meets the definition of a discontinued operation in accordance with paragraph 32.

Gains or losses relating to continuing operations

37 Any gain or loss on the remeasurement of a non-current asset (or disposal group) classified as held for sale that does not meet the definition of a discontinued operation shall be included in profit or loss from continuing operations.

Presentation of a non-current asset or disposal group classified as held for sale

38 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.  The major classes of assets and liabilities classified as held for sale shall be separately disclosed either in the statement of financial position or in the notes, except as permitted by paragraph 39.  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.

39 If the disposal group is a newly acquired subsidiary that meets the criteria to be classified as held for sale on acquisition (see paragraph 11), disclosure of the major classes of assets and liabilities is not required.

40 An entity shall not reclassify or re-present amounts presented for non‑current assets or for the assets and liabilities of disposal groups classified as held for sale in the statements of financial position for prior periods to reflect the classification in the statement of financial position for the latest period presented.

Additional disclosures

41 An entity shall disclose the following information in the notes in the period in which a non-current asset (or disposal group) has been either classified as held for sale or sold:

(a) a description of the non-current asset (or disposal group);

(b) a description of the facts and circumstances of the sale, or leading to the expected disposal, and the expected manner and timing of that disposal;

(c) the gain or loss recognised in accordance with paragraphs 20-22 and, if not separately presented in the statement of comprehensive income, the caption in the statement of comprehensive income that includes that gain or loss; and

Transitional Provisions

Aus42.1 The following transitional paragraph shall not be applied by entities that have previously applied this Standard, unless required to do so by another Australian Accounting Standard.

43 The Standard shall be applied prospectively to non‑current assets (or disposal groups) that meet the criteria to be classified as held for sale and operations that meet the criteria to be classified as discontinued after the application date of the Standard.  An entity may apply the requirements of the Standard to all non‑current assets (or disposal groups) that meet the criteria to be classified as held for sale and operations that meet the criteria to be classified as discontinued after any date before the application date of the Standard, provided the valuations and other information needed to apply the Standard were obtained at the time those criteria were originally met.

Effective Date

44 [Deleted by the AASB]

44A [Deleted by the AASB]

44B [Deleted by the AASB]

Aus44B.1 AASB 2008-3 Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127 added the disclosures required by paragraph 33(d).  The amendment shall be applied retrospectively.

44C Paragraphs 8A and 36A were added by AASB 2008-6 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project issued in July 2008.  An entity shall apply those amendments for annual reporting periods beginning on or after 1 July 2009.  Earlier application is permitted.  However, an entity shall not apply the amendments for annual reporting periods beginning before 1 July 2009 unless it also applies AASB 127 Consolidated and Separate Financial Statements (as amended in 2008).  If an entity applies the amendments before 1 July 2009 it shall disclose that fact.  An entity shall apply the amendments prospectively from the date at which it first applied AASB 5, subject to the transitional provisions in paragraph 45 of AASB 127 (as amended in 2008).

44D Paragraphs 5A, 12A and 15A were added and paragraph 8 was amended by AASB 2008-13 Amendments to Australian Accounting Standards arising from AASB Interpretation 17 – Distributions of Non-cash Assets to Owners in December 2008.  Those amendments shall be applied prospectively to non-current assets (or disposal groups) that are classified as held for distribution to owners in annual reporting periods beginning on or after 1 July 2009.  Retrospective application is not permitted.  Earlier application is permitted.  If an entity applies the amendments for a period beginning on or after 1 January 2005 but before 1 July 2009 it shall disclose that fact and also apply AASB 3 (March 2008, as amended), AASB 127 Consolidated and Separate Financial Statements (as amended in July 2008) and AASB Interpretation 17 Distributions of Non-cash Assets to Owners.

44E Paragraph 5B was added by AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project issued in May 2009.  An entity shall apply that amendment prospectively for annual reporting periods beginning on or after 1 January 2010.  Earlier application is permitted.  If an entity applies the amendment for an earlier period it shall disclose that fact.

44F [Deleted by the IASB]

44G AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards, issued in August 2011, amended paragraph 28.  An entity shall apply that amendment when it applies AASB 11 Joint Arrangements.

44H AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13, issued in September 2011, amended the definition of fair value in Appendix A.  An entity shall apply that amendment when it applies AASB 13 Fair Value Measurement.

44I AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income, issued in September 2011, amended paragraph 33A.  An entity shall apply that amendment when it applies AASB 101 as amended in September 2011.

44J [Deleted by the IASB]

44K AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) (as amended) amended paragraph 5.  Paragraph 44F, added by AASB 2010-7, was deleted by AASB 2014-1 Amendments to Australian Accounting Standards.  Paragraph 44J, added by AASB 2014-1, was deleted by AASB 2014-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2014).  An entity shall apply those amendments when it applies AASB 9 (December 2014).

44L AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards 2012–2014 Cycle, issued in January 2015, amended paragraphs 26-29 and added paragraph 26A.  An entity shall apply those amendments prospectively in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors to changes in a method of disposal that occur in annual reporting periods beginning on or after 1 January 2016.  Earlier application is permitted.  If an entity applies those amendments for an earlier period it shall disclose that fact.

Withdrawal of IAS 35

45 [Deleted by the AASB]

Appendix A

Defined Terms

This appendix is an integral part of AASB 5.

Appendix B

Application Supplement

This appendix is an integral part of AASB 5.

Extension of the period required to complete a sale

B1 As noted in paragraph 9, 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).  An exception to the one-year requirement in paragraph 8 shall therefore apply in the following situations in which such events or circumstances arise:

(a) at the date an entity commits itself to a plan to sell a non-current asset (or disposal group) it reasonably expects that others (not a buyer) will impose conditions on the transfer of the asset (or disposal group) that will extend the period required to complete the sale, and:

(i) actions necessary to respond to those conditions cannot be initiated until after a firm purchase commitment is obtained; and

(ii) a firm purchase commitment is highly probable within one year;

(b) an entity obtains a firm purchase commitment and, as a result, a buyer or others unexpectedly impose conditions on the transfer of a non-current asset (or disposal group) previously classified as held for sale that will extend the period required to complete the sale, and:

(i) timely actions necessary to respond to the conditions have been taken; and

(ii) a favourable resolution of the delaying factors is expected;

(c) during the initial one-year period, circumstances arise that were previously considered unlikely and, as a result, a non-current asset (or disposal group) previously classified as held for sale is not sold by the end of that period, and:

(i) during the initial one-year period the entity took action necessary to respond to the change in circumstances;

(ii) the non-current asset (or disposal group) is being actively marketed at a price that is reasonable, given the change in circumstances; and

(iii) the criteria in paragraphs 7 and 8 are met.

deleted ifrs 5 text

Deleted IFRS 5 text is not part of AASB 5.

Paragraph 44

An entity shall apply this IFRS for annual periods beginning on or after 1 January 2005.  Earlier application is encouraged.  If an entity applies the IFRS for a period beginning before 1 January 2005, it shall disclose that fact.

Paragraph 44A

IAS 1 (as revised in 2007) amended the terminology used throughout IFRSs.  In addition it amended paragraphs 3 and 38, and added paragraph 33A.  An entity shall apply those amendments for annual periods beginning on or after 1 January 2009.  If an entity applies IAS 1 (revised 2007) for an earlier period, the amendments shall be applied for that earlier period.

Paragraph 44B

IAS 27 Consolidated and Separate Financial Statements (as amended in 2008) added paragraph 33(d).  An entity shall apply that amendment for annual periods beginning on or after 1 July 2009.  If an entity applies IAS 27 (amended 2008) for an earlier period, the amendment shall be applied for that earlier period.  The amendment shall be applied retrospectively.

Paragraph 45

This IFRS supersedes IAS 35 Discontinuing Operations.

[1]  For assets classified according to a liquidity presentation, non-current assets are assets that include amounts expected to be recovered more than twelve months after the reporting period.  Paragraph 3 applies to the classification of such assets.

[2]  However, once the cash flows from an asset or group of assets are expected to arise principally from sale rather than continuing use, they become less dependent on cash flows arising from other assets, and a disposal group that was part of a cash‑generating unit becomes a separate cash-generating unit.

[3]  Other than paragraphs 18 and 19, which require the assets in question to be measured in accordance with other applicable Australian Accounting Standards.

[4]  Costs to distribute are the incremental costs directly attributable to the distribution, excluding finance costs and income tax expense.

[5]  If the non-current asset is part of a cash-generating unit, its recoverable amount is the carrying amount that would have been recognised after the allocation of any impairment loss arising on that cash-generating unit in accordance with AASB 136.

[6]  Unless the asset is property, plant and equipment or an intangible asset that had been revalued in accordance with AASB 116 or AASB 138 before classification as held for sale, in which case the adjustment shall be treated as a revaluation increase or decrease.

[7]  Not‑for‑profit entities should refer to AASB 136 Impairment of Assets when the future economic benefits of an asset are not primarily dependent on the asset’s ability to generate net cash inflows.