What is the presentation of NCAHFS?
Current Asset
Conditions for sale to be highly probable
- Committed yung management to sell the asset/disposal group
- Active program to locate a buyer + complete the plan must have been initiated
- Reasonable yung sale price in relation to the fair value
- Expected to be a completed sale (within 1 year of reclassification)
- Unlikely that the plan will be significantly changed or withdrawn
How is income from discontinued operation recorded in the income statement?
- As a single line item
- post tax
- after continued operations
Does NCAHFS depreciate?
No, because it is considered a current asset already.
What is the initial measurement of NCAHFS?
CA or FVLCTS
(whichever is lower)
exclusive of finance cost and income tax expense
What is the subsequent measurement of NCAHFS?
CA or FVLCTS
(whichever is lower)
exclusive of finance cost and income tax expense
It is a group of assets to be disposed of in a SINGLE TRANSACTION (and the liabs directly associated will be transferred)
Disposal Group
It is an NCA or disposal group that is held for sale
NCAHFS
What are the two conditions for an asset to be classified as NCAHFS
- available for immediate sale yung NCAHFS in its present condition
- sale must be highly probable
Are finance costs and income tax expense included in the measurement of NCAHFS?
No. These are not included in costs to sell.
What happens if CA > FVLCTS?
There is an impairment loss.
What do you do if an impairment loss arises in a disposal group?
1st Step: Allocate to goodwill
2nd Step: Allocate the remaining amount prorata to the CA of each NCAHFS.
What will happen if you have a subsequent increase in FVLCTS?
There will be a gain but only to the extent of impairment loss.
Essentially, only reversal of IL can happen.
How could you say that there is a gain on disposal of NCAHFS?
CA < SP = gain
Carrying amount is the latest measurement.
How could you say that there is a loss on disposal of NCAHFS?
CA > SP = loss
Carrying amount is the latest measurement.
If an asset following the revaluation model is turned into a NCAHFS, what are the steps in measurement?
- Revalue at the most recent Fair Value. (FV - CA = Revaluation Surplus in OCI)
- Reclassify as NCAHFS (CTS is put to P/L and is treated as IL)
- Subsequent measurement is at lower between CA and FVLCTS
- Disposal of NCAHFS
Can abandoned NCA be considered as NCAHFS?
No
If an NCAHFS is reclassified back into NCA, how do you measure this?
Lower between CA as if never naging NCAHFS and Recoverable Amount.
Recoverable Amount = Higher between FVLCTS and VIU
When is there a gain/loss on reversal of NCAHFS?
Gain: If the new carrying amount of NCA > old carrying amount (NCAHFS)Loss: New carrying amount < Old Carrying Amount
Note: in the context of reclassification.
How do you solve for income from discontinued operations?
Sales
Less: COGS
—————–
GP
Less: Expenses
Less: Termination Costs
Less: Impairment Loss
——————–
Income before tax
Less: Income Tax
———————
Income from discontinued operations
Where is the solution for discontinued operations presented?
Notes to FS
