SARANSH Indian Accounting Standards

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Scope out -
Objective Measurement
Accounting provisions
for assets Deferred tax assets Criteria for Measurement Presentation
held for sale - Ind AS 12 classifying Presentation
of assets and
Financial Assets existing and
Presentation classified as Disclosure of
- Ind AS 109 assets as held Disclosure of
and disclosure held for sale Non-current
Agriculture for sale Discontinued
of asset held asset held for
- Ind AS 41 sale Operations
for sale and Contractual rights
discontinued - Ind AS 104
operations Employee benefits
- Ind AS 19

Objective Classification Measurement and Presentation

Measurement = at the lower of carrying amount and fair
Accounting for value - costs to sell
non-current
assets held for
sale or disposal Cessation of depreciation on such assets
groups
Ind AS 105 Presented separately in the balance sheet

Discontinued Results of discontinued operations to be presented

operations separately in the statement of profit and loss

Disclosure

Measurement provisions of Ind AS 105 do not apply to

Deferred tax Assets arising from Non-current Assets

Assets Financial Assets Contractual rights
Employee benefits which are measured under Insurance
at Fair value less cost contracts
to sell
Ind AS 12 Ind AS 19 Ind AS 109

Ind AS 41 Ind AS 104

Note: 5. Measurement requirements of this Ind AS apply to

the group as a whole, so that the group is measured
1. Assets classified as non-current (as per Ind AS 1), at the lower of its carrying amount and fair value
shall not be reclassified as current assets until they less costs to sell.
meet the criteria to be classified as held for sale as 6. The classification, presentation and measurement
per Ind AS 105. requirements in this Ind AS are applicable to
2. Non-current assets acquired exclusively for resale shall both non-current asset (or disposal group) that is
not be classified as current unless they meet the criteria classified as:
to be classified as held for sale as per Ind AS 105. • held for sale; and
3. Disposal group may be a group of cash-generating • held for distribution to owners.
units, a single cash-generating unit, or part of a 7. This Ind AS specifies the disclosures required in
cash-generating unit. respect of non-current assets (or disposal groups)
4. The group may include any assets and any liabilities classified as held for sale or discontinued
of the entity, including current assets, current operations. Disclosures in other Ind ASs do not
liabilities and assets excluded from the measurement apply to such assets.
requirements of this Ind AS.

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SARANSH Indian Accounting Standards

Classification of non-current assets (or disposal groups) as held for sale or held for distribution to owners

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

Available for In its present condition

immediate Sale*/
distribution
Management is committed to a plan to sell/
distribute the asset

Key requirements for

non-current assets An active programme to locate a buyer and
held for sale or held for complete the plan/distribution has been initiated
distribution to owners
Asset is actively marketed for sale at a price
that is reasonable in relation to its current fair
value***
Sale/distribution must
be highly probable Sale/distribution should be expected to qualify
for recognition as a completed sale/distribution
within one year from the date of classification**

It is unlikely that significant changes to the

plan will be made for completion of plan/sale/
distribution or plan/distribution should not
be withdrawn

* Sale transactions include exchanges of non-current assets for Measurement of non-current assets (or disposal
other non-current assets when the exchange has commercial groups) classified as held for sale
substance

**If the entity remains committed to its plan to sell the asset Fair value less
(or disposal group), events or circumstances beyond the costs to sell
Value of
entity’s control may extend the period to complete the sale non-current
beyond one year asset (or
Lower of disposal
***Not applicable for non-current assets held for distribution Carrying both group)
to owners amount classified as
held for sale

Note: Note:
If the asset (or disposal group) is acquired as part of a business
S. No. Particular Details
combination, it shall be measured at fair value less costs to sell.

1. Acquisition of non- Classify the non-current Fair value

current asset (or asset (or disposal group) as less costs to
disposal group) with held for sale subject to the distribute* Value of non-
current asset
intention to subsequent conditions specified in the (or disposal
sale within a year above chart Lower of group)
Carrying both classified
2. Non-current assets that It shall not be classified amount as held for
are to be abandoned as held for sale since its distribution to
owners
carrying amount will be
recovered principally
*Costs to distribute are the incremental costs directly
through continuing use
attributable to the distribution, excluding finance costs and
and not from sale
income tax expense.

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SARANSH Indian Accounting Standards

Recognition of impairment losses and reversals Changes to a plan of sale or to a plan of distribution
to owners
• An entity shall recognise an impairment loss for any
initial or subsequent write-down of the asset (or • If an asset (or disposal group) classified as held for sale
disposal group) to fair value less costs to sell. or as held for distribution to owners previously, no
longer meets the criteria for such classification, then
• An entity shall recognise a gain for any subsequent it shall be ceased to classify as the asset (or disposal
increase in fair value less costs to sell of an asset to group) held for sale or held for distribution to owners
the extent of the cumulative impairment loss that has (respectively).
been recognised previously
• If an entity reclassifies an asset (or disposal group)
• An entity shall not depreciate (or amortise) a non- directly from being held for sale to being held for
current asset while it is classified as held for sale or while distribution to owners, or directly from being held for
it is part of a disposal group classified as held for sale. distribution to owners to being held for sale, then the
change in classification is considered a continuation
• Interest and other expenses attributable to the of the original plan of disposal.
liabilities of a disposal group classified as held for sale
shall continue to be recognised. • The entity shall not change the date of classification.

Measurement in case of above changes

Carrying amount before

the asset was classified as
held for sale/distribution to
owners, adjusted for any
depreciation, amortisation
or revaluations that would
have been recognised
Any required
had the asset (or disposal adjustment to
Value of a
group) not been classified non-current the carrying
as held for sale or as held asset (or amount of a
Lower of for distribution to owners. disposal non-current
group) on asset shall be
reclassification in profit or loss
from continuing
operations

Its recoverable amount at

the date of the subsequent
decision not to sell or
distribute.

Presentation and Disclosure of a non-current asset (or disposal group) classified as held for sale

• Present a non-current asset classified as held for sale separately from other
assets in the balance sheet.
• Present the liabilities of a disposal group classified as held for sale separately
from other liabilities in the balance sheet. Those assets and liabilities should not
be offset and presented as a single amount.
• Separate disclosure is required for major classes of assets and liabilities
classified as held for sale.
Presentation • Present separately any cumulative income or expense recognised in OCI
relating to such non-current asset classified as held for sale.
• Comparative amounts are not reclassified or re-presented to reflect the
classification in the balance sheet for the latest period presented.
• Any gain or loss on the remeasurement does not meet the definition of a discontinued
operation shall be included in profit or loss from continuing operations.

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SARANSH Indian Accounting Standards

• Description of the non-current asset (or disposal group)

• Description of facts and circumstances of the sale, or leading to the expected
disposal and the expected manner and timing of that disposal
• Gain or loss recognised and if not presented separately on the face of the income
Disclosure statement, the caption in the income statement that includes that gain or loss
• The reportable segment in which the non-current asset (or disposal group) is
presented, if any
• If there is a change of plan to sell, a description of facts and circumstances leading to
the decision and its effect on results

Discontinued operations
represents
a separate
major line of
business or
A component of geographical
an entity* operations; or
that has
Discontinued
either been operations
disposed of is a subsidiary is part of a single
acquired co-ordinated
exclusively with plan to dispose of
or classified as a separate major
a view to
held for sale resale; or line of business
or geographical
operations

* A component of an entity will have been a cash-generating unit or a group of cash-generating units while being held for use

Presentation and Disclosure of Discontinued Operations

S. No. Particulars Detail disclosure
1. Separate Ŷ Presentation and disclosure shall enable users of the financial statements to evaluate the financial
presentation effects of discontinued operations and disposals of non-current assets (or disposal groups)
Ŷ This allows the user to distinguish between continuing operations and those which will not
2. In the Ŷ Disclose a single amount comprising the total of:
statement of (a) the post-tax profit or loss of discontinued operations; and
profit and (b) the post-tax gain or loss recognised on the measurement to fair value less costs to sell or on the
loss disposal of the assets or disposal group(s) constituting the discontinued operation.
Ŷ Disclose the analysis of this single amount into:
(a) the revenue, expenses and pre-tax profit or loss of discontinued operations;
(b) the related income tax expense as required in Ind AS 12;
(c) the 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; and
(d) the related income tax expense as required in Ind AS 12
Ŷ Present the analysis in the notes or in the statement of profit and loss
Ŷ Disclosure of 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
Ŷ Disclose the amount of income from continuing operations and from discontinued operations
attributable to owners of the parent. These disclosures may be presented either in the notes or in the
statement of profit and loss
3. In the Ŷ Disclose the net cash flows attributable to the operating, investing and financing activities of discontinued
statement of operations either in the notes or in the financial statements
cash flows Ŷ 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
Ŷ Comparative figures for prior periods are also re-presented
4. Adjustment Adjustments in the current period to amounts previously presented in discontinued operations that
to prior are directly related to the disposal of a discontinued operation in a prior period should be classified
period separately in discontinued operations. The nature and amount of such adjustments are disclosed.
disposals

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