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IFRS 5

15 December 2008 2,451 views No Comment
Dear all,
 
Is it possible to reclassify asset held for sale back to PPE?
 
 
Thanks,
Grace


Dear,

the guidances in this case are explianed in IFRS5.26 to IFRS5.29

Best regards,

         



Dear DivineIt is possible to reclassify an asset held for sale back to PPE if the criteria for classification are no longer met or if there is a change in plan for sale. The asset would need to be remeasured. Please refer to paragraphs 26 to 29 and 42 of IFRS 5 for more details on measurement and disclosure.

Regards
Vatsala



DEAR grace,
 
yes it is possible  but in that case the dep. must be charged from the date of original classification till the date of re -classification and since the asset cant be sold you need to charge “impairment loss ” also  . in effect a net adjustment is required to be recg.  i.e you should take into account
 
1) Loss charged on original classification
2) dep.which should have been charged
3) the current impairment loss which arises under IAS 36 due to the fact that asset cant be
    sold.
 
remember for charging dep.  the value of asset shall be the value on the date of original classification .
 
if the asset is one foe which “revaluation reserve/surplus” exist then you need to be very carefull if your policy is to transfer excess dep.to equity/reserves as this excess must be transferred to reserves.
 
regards,
 
rohit
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