Introduction to IFRS 5 and assets held for sale

In this lesson

1. 0:00 Non-current assets held for sale and discontinued operations
2. 0:25 Introduction to IFRS 5 objectives
3. 0:53 IFRS 5 key requirements overview
4. 1:54 Assets and operations outside IFRS 5 scope
5. 3:02 Defining assets held for sale
6. 3:45 Recognition criteria for held for sale classification
7. 5:03 Measuring and reclassifying held for sale assets
8. 6:17 Worked example: building reclassified as held for sale

About this lesson

You'll discover what qualifies an asset as held for sale, how to measure and reclassify it correctly, and how to calculate the impairment adjustment needed when fair value falls below carrying amount. This is essential knowledge for Financial Reporting and Strategic Business Reporting papers, where IFRS 5 questions test your ability to handle asset disposals and discontinued operations accurately. The session covers the core requirements of IFRS 5 in detail. Assets must be remeasured at the lower of carrying amount and fair value less selling costs, then reclassified as current assets on the statement of financial position. Critically, depreciation stops once an asset is classified as held for sale. The video walks through the specific recognition criteria you need to apply: the asset must be available for immediate sale, the sale must be highly probable, an active marketing programme must exist, and completion must be expected within one year. A worked example demonstrates how to calculate the carrying amount at the date of reclassification, determine the fair value less selling costs, and recognise any impairment loss in profit or loss. You'll see how to handle the mechanics step by step, including how to treat selling costs and why the timing of reclassification matters for depreciation calculations. Understanding this practical application helps you tackle exam questions confidently and avoid common errors when assets move from use to disposal.

Duration: 9m