International Financial Reporting Standard 5
The International Financial Reporting Standard 5 (IFRS 5) is an accounting standard of the International Accounting Standards Board (IASB), and includes rules for accounting held for sale non-current assets and discontinued operations.
The regulations apply to all long-term assets held for sale with the following exceptions:
- deferred tax assets ( IAS 12 ),
- Assets resulting from employee benefits ( IAS 19 ),
- Financial instruments that fall under IAS 39 ,
- real estate valued at fair value as investment property IAS 40 ,
- Assets recognized at fair value less estimated selling costs in accordance with IAS 41 (Agriculture) and
- Claims from insurance contracts.
One or a group of long-term assets is classified as “available for sale” if the asset can realistically be sold immediately or most likely in the near future (within one year) and the sale has been decided and actively pursued. Assets classified in this way are to be valued at the lower of book value and fair value less costs to sell. The impairment loss is to be recognized in profit or loss. Long-term assets classified for sale are then no longer depreciated and must be shown separately in the balance sheet.
