SFAS 144, August 2001 Risks and rewards have been transferred from the seller to the buyer. --> a gain is recognized up to "the cumulative loss" previously recognized A gain or loss Discontinued_operations_slides - Discontinued operations Typical coverage of US GAAP Criteria for classification as non-current assets held for sale. Depreciation US GAAP IFRS . There are six criteria to achieve held for sale accounting. Discontinued Operations under GAAP. zNon-current assets (and disposal groups) held for sale generally are measured at the lower of carrying amount and fair value less costs to sell and are disclosed separately on the face of the balance sheet. 3.3 Held-for-Sale Criteria 55 3.3.1 Management, Having the Authority to Approve the Action, Commits to a Plan 55 3.3.2 Available for Immediate Sale in Its Present Condition 56 3.3.3 An Active Program to Locate a Buyer and Other Actions Required to Complete the Plan Have Been Initiated 58 consistent with generally accepted accounting principle (GAAP). zAssets classified as held for sale are not amortised or depreciated. Available-for-sale (AFS) is an accounting term used to describe and classify financial assets. Impairment loss is not reversed Long-lived assets "held for sale" The entity will continue to use the building until another building has been found with equivalent facilities, and in a suitable location for the office staff, who will not be relocated until the new building has been found. Cost includes (A) Revenue recognition is an accounting principle that outlines the specific conditions under which revenue is recognized. Non-current assets held for sale and discontinued operations EY, International GAAP 2020 (2020) The latest edition of this comprehensive guide offers a global perspective and explanations of complex technical accounting issues to help practitioners interpret and implement IFRS. Topic 320: Investments-Debt and Equity Securities, ASC Codification (B) carrying amount 1. In this guide, we provide an overview, by accounting area, of the similarities and differences between US GAAP and IFRS. When management decided to put Tayto on the market, it would be a disposal group held for sale. (1) component that has been disposed of 21 Chapter 4: How do securitizations fare under IFRS? 5. --> when there is an indication that carrying amount may not be recoverable How an Available-for-Sale Security Works . Property, Plant and Equipment, Codification Topic 360 It sets the presentation and disclosure requirements for discontinued operations. Measured at cost This guide addresses recognition principles for both IFRS and U.S. GAAP. Discontinued_operations_slides - Discontinued operations... School San Beda College Manila - (Mendiola, Manila) Course Title CAS BSA; Type. Establishes criteria beyond that previously specified in Statement 121 to determine when a long-lived asset is held for sale, including a group of assets and liabilities that represents the unit of accounting for a long-lived asset classified as held for sale. Subsequent measurement of property, plant and equipment Those Board decisions are tentative and do not change current accounting. This is the case where the asset (or disposal group) is available for immediate sale in its present condition, its sale is highly probable, and the sale is expected to be completed within one year from the date of classification. FRS 102 does not have a similar concept to IFRS of assets being classified as ‘held for sale’. The conditions for a non-current asset or disposal group to be classified as held-for-sale are as follows: the assets must be available for immediate sale in their present condition and its sale must be highly probable the asset must be currently marketed actively at a price that is reasonable in relation to its current fair value 61 Chapter 8: What about the investors? 1. Impairment of long-lived assets 1. Classification of long-lived assets Both accounting models have similar recognition criteria, requiring that costs be included in the cost of the asset if future economic benefits are probable and can be reliably measured. Criteria to Be Met. Impairment and disposal of long-lived assets --> adjusts the carrying amount of the asset Where an entity intends to sell a tangible fixed asset in the near future, the asset should continue to be held in fixed assets in the balance sheet unless that asset is being transferred to stock for sale in the ordinary course of the company’s business. A business or nonprofit activity that, on acquisition, meets the criteria in paragraph 205-20-45-1E to be classified as held for sale also is a discontinued operation. 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