Case studies on ifrs 5


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Case studies on ifrs 5

  1. 1. CASE STUDIES ON IFRS 5Case Study 1Company X is committed to a plan to sell its building and has givenan advertisement to locate a buyer. It intends to transfer the buildingto a buyer after it vacates the building which would be after theregistration.Has it satisfied the condition for terming the plant as asset availablefor sale?Case study 2In the above case if the company X would vacate only if its newbuilding construction is completed would it fulfil the definition of theasset available for sale?CASE STUDY 3HK LTD is planning to sell a plant and has initiated actions and hasidentified a buyer. There are pending customer orders. It intends tosell the plant with its operations. All pending orders on the date ofsale will be transferred to the buyer.Will you consider this plant as available for immediate sale?Will your answer be different if the sale would take place only afterthe pending orders are completed and it would take 30 days to doso?Case study 4The board of R Ltd a PSU has decided to sell a division for which theconcerned ministry has given the approval. The ministry’s approval isto be obtained before the selection of the purchaser. Sale may alsorequire the approval of Disinvestment Commission. Hence it maytake more than a year to sell. Can you classify the division asdisposal group held for sale