IND AS 105 : NON-CURRENT ASSETS HELD

FDR SALE AND DISCONTINUED OPERATION

(l) Non-Current Assets

a life
These are assets other than current assets i.e. usually assets having
of more than 12 months.
(2) Disposal Group
h a single
Refers to 9!~up of assets / LiabilitiesUntended to be sold ~hroug
transaction.
Example: 1 classroom out of 10 -, ck'foial. hwt -11et e/.J!f,. ~15
Yv'
of disposal
Clarification: Current asset and any liability can also be a part
impairment /
group if management also \ntends to sell them. However,
write off, provisions of IND As 105, will ~ot apply to these Curren
t Assets & {J
Liabilities (similar to CGU).
(3) Discontin.Jcd Operation
tfao K(> ' Represents a component of the entity which has
been disposed/ discontinued
represents
dirj ~ or is classified as held for sale. A discontinued operation usually
rf( \ a separate major line of business or geography.
L_ Example; 10-cla~srooms out of 10 classroo_ms int.ended~~ be sold
__- __

DISCONTINED OPERATION

Component

Discontinued Held for sale

Disposed [Abandoned / [ Not yet sold]
[Sold] cessation] (future event)
(Past event) ( Past event)

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CA BHAVIK CHOKSHI

NA
 (11) Scope

,,,•§• Inventory (Curren~

/ - - Ananclal Assets (IND PS 109))

IND 105 does

not cover:
----- Biological Assets (IND AS 41) J
•. ·-•••• •, Deferred Tax ~sets (IND AS 12) )

Any type of Liabilities (As the IND AS applies to asse

~: P.P.E •

( Intangibles •
n shortI

( Goodwill ----- DAS 105

plies to:

( Investment Property

Investment In subsidiary/ JV/ Associate at cost In SFS

(Refer Q. 1., 2, 4)

(Ill) [lassif1catron of Non Current Assets / Disposal Group as

Held for $-a)ii
• ",'. • l

CRITERIA FOR CLASSIFICATION

. ~ ·~i~t~-~;-·-..
AVAILABLE FOR IMMEDIATE SALE IS HIGHLY
SALE IN THE PRESENT PRO BABU:-
CONDITION

(1) An asset which is intended to be (1) Appropriate level of manage ment is

renovated cannot be classified committ ed to the sale plan.
as held for sale till the time E.g.: Board/ Shareholder Approval
renovation is completed (2) Active process to find a buyer has started
(2) Assets which remain vital for the Broker Appointed / Buyer is identified
entity's ongoing operations cannot E.g.: Broker Appointed
be classified as held for sale E.g.: (3) Asset is markete d and continues to be
An asset needed to complete a marketed at a reasonable price compared
backlog of order to the Fair Value
(3) Exceptions: Leqal / Customnry (4) The sale is expected to be completed
delays which arc usur1I for the sale within 1 year from the date of
of ';1milc:ir as<,cts can be iqnored. r/r1c;c;1tir;iti0n
E.g.• Rcguldtor 's Approval (5) Withdrawal from sale plan is unlikely.

OKSHI
 Abandonment / Temporary Retirement:
t~an don
(l) These are not Sale tr~nsactlon and an asset held with the Intention
be classified
/ temporarily retired 1s not covered under IND AS 105 and-cannot
as held for sale.
events Occurring during the post Balance Sheet period
2 of conditions
< > The classification under IND AS 105 is based on the satisfaction
non-co mplian ce cannot
on the Balance Sheet Date. Subsequent compliance /
g Event)
;ifect the classification on the Balance sheet Date (Non-Adjustin
(J) stake Sale In case of a Subsidiary
the entire net
In case the expected stake sale would result in a loss of control,
accounts.
assets of the subsidiary will be shown as held for sale in the consolidated
---
(4) Exception for 1 year
1 year has
An Item can be continued to be shown as held for sale even s?fter
passed if: •
{a) The del;;,y is due to factors beyond the entity's control.
Example: Delay by the regul ator~
{b) The m:.mage,-nent continues to be committed to the sale plan

(Refer Q. 3, 5, 6, i .11:, .tl 4)

I I I •
IND AS like
(1) As on the date of classification as held for sale, all applicable
should
IND AS 16 , IND AS 38 , IND AS 36 (Impairment if indicators exist)
be appl~d and carrying value should be determ ined
(2) The non-current asset held for sale should be valued
at the Lm-lcr of:
all IND AS)
(a) Carrying Value on the date of classification (After applying
( OR)
of a loss,
(b) Fair Value - Cost to Sell on the date of classification. In case
-
the difference should be debited to the P&L. ICAI refers to
" impairment loss (under IND AS 10~) I/ (i. t. UYuu cl6)
this loss as

classl¥i~d as held for

(3) Depreciation will stop from the date the asse{ Is
~e I)
Points (2) and (3) ar; similar to inventory valuation i.e. (Inventory is valued
of
at the lower of cost NRV and it do~s not get depreciated.)
disclosed in the
(4) The Non-current asset held for sale should be separately
Balance Sheet as a separate Une Item.

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C'TS 1&
w~ ~ ~ ~ p, v ~ c:r ~ ~ ~ " " a " Fv - crs '

CA BHAVIK CHOKSHI
 EXAMPLE

Date Particulars
1/4/18 PPE: Purchase (Life 10 years) 10a'
----...:..___
100 ~
(-) Depreciation [ 10 x 5 years (SO)

so-
31/3/23 ''Nh Held for sale classification on 30/09/23 /J -------
so-
Therefore, 1/4/23
1
°°
(-) Depreciation [ 10 x 0.5 yea~ s-----
Carrying value for classifying as held for sale (Post
45
-
a_pplying IND AS 16)
-
30/09/23 Carrying Value 45

Fair Value - Cost to sell

is call! :ti impairment
Therefore, asset will be recorded at 38 and loss of Rs 7 (45 - 38)
and tr91Jsfer ta P& L.
it shouti.1 be shown at
Post classification as held for sale. Depreciation will stop and
lower of cost or NRV & should be compared at each balance sheet_g
_atg.

Held fo}Ji.,; •_e Criteria

(VJ Change in the Plan to Sell / Asset to Longer Meeting the
sale is no longer highly
In case an entity subsequently changes its plan to sell or the
of:
probable, then the asset should be reclassified to P.P.E at the lower
was never
(a) Carrying Value on the date of reclassification assuming the asset
deprec iation and impairm ent
classified as held for sale (i.e. after considering
105)
under IND AS 36 but not considering impairment under IND AS
(b) Recoverable Value on the date of reclassification
ification and the above
The difference between the ledger balance on the date of reclass
t/ loss).
value should be shown as a gain/ loss on reclassification (profi
in service potential we should also check
Additionally, in case there is an improvement
so, we can follow the below
for reversal of impairment loss under IND AS 36. While doing
mentioned order for recording:
(i) Gain/ Loss on reclassification under IND AS 105
(ii) Reversal under IND AS 36

(ReferQ. 7)

I 130 CA BHAVIK CHOKSHI

 Disposal Group Held for Sale
·nciP es remain th same as impairment loss in a CGU.
,he pri .

,~~~~~

c0
Calculate carryin ...
,r..,,...,.,... disposal
group as per the ~i-~,;;. e date
of classlftcatlon

..,,,......._..,..,_.._,...._
Allocation of Lo

. E) •,··t {i) :. Goodwill

. <~(ii).,' Excess
,.;I-) ,;

:•\fi(llj: ,ln~estment -~ro

•-~1t•·'<
,1,:d".,,.' •· of such a loss can
...,,_ •
• ,•·t1.r,~,•~;.1-, I rt
1}:~'-':: • _nvento es, Finan
&11filliliabllitles are not
[ft7}_~h~~7ssment should again be done at~ Balance s eetiD~~
i5.~;{,:-'.!~ a further reduction less cos s
~asJ9b,ove should be follow
1@ij•_·:e,r.~~~i{tLon ·in subseq for;, PPE r
~
saffas'a part of Disposal Group)
'.J.'?.~,-~.,1,,,--,........__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
•

(Refer Q. 8, 10)

[VIII 01scontinuegi •'er:ations

~... ~4,

A seP.arate disclosure should be given on the face of the INCOME Statement in order
to record profit / losses from Discontinued Operations and their corresponding tax as
separate line items.
The ~exenue / ~ J o ~ the face of income statement should be for continuing
operations only. Further, such a split on the face of income statement is not needed for
,-;:::
non current assets or disposal groups held for sale.

(Refer Q. 9, 11)

CA BHAVIK CHOKSHI
INHiiiM&MiiMIHiil<il5ii1i·riii~iiilN=@i1iil-iitake i·i'.,iiiiiiM1~
to sell these items, they will be n over at ~ .
In case a~guirer also intends ~r
iness combination.
value - Cost to sell at the time of bus

•®••·€i,Mii,1€iii¥M-E-+iii■ii4if111i,i4,E4i 41i·l•iil·i'i4irl·i¥,t·i"i•E~i@Hi•/l½:
airment under IND AS 36 and JN ;~
imp
We compare carrying value (before ~ fair Valu
sale classification became app lica ble
105) on date when held for - ~--.;;:.:.ie

(-) cost to sell (at subsequent reporting dates)

«

KEY POINTS
is still held for sale
1. No subsequent depreciation as asset fair
e i.e. we can directly take subsequent
2. No need to check for recove ble valu
value-cost to se still held for sale)

(Re fer Q. 1.2)

Lv (E)()

hvpP[Jc, {'.lo)
-==to
/IIID Af I or 10

6o

CA BHAVIK CHOKSHI