Page 6 - 11. COMPILER QB - INDAS 105

 The division will be regarded as discontinued operation for the quarter ended 30th June, 2018. It

represents a separate line of business and is held for sale at the year end.
 The Statement of Profit and Loss should disclose, as a single amount, the post-tax profit or loss of the

division on classification as held for sale.
Further, as per Ind AS 33, EPS will also be disclosed separately for the discontinued operation.

Q3 (Nov 21)

On February 28, 20X1, Entity X is committed to the following plans:
(a) To sell a property after completion of certain renovations to increase its value prior to selling it. The

renovations are expected to be completed within a short span of time i.e., 2 months.
(b) To sell a commercial building to a buyer after the occupant vacates the building. The time required for
vacating the building is usual and customary for sale of such commercial property. The entity considers
the sale to be highly probable.
Can the above-mentioned property and commercial building be classified as non- current assets held for sale

at the reporting date i.e. 31st March, 20X1?
Solution

Ind AS 105 provides guidance on classification of a non-current asset held for sale in paragraph 7 which
states that, the asset (or disposal group) must be available for immediate sale in its present condition
subject only to terms that are usual and customary for sales of such assets (or disposal groups) and its
sale must be highly probable.

(a) In respect of Entity X’s plan to sell property which is being renovated and such renovation is incomplete
as at the reporting date. Although, the renovations are expected to be completed within 2 months from
the reporting date i.e., March 31, 20X1, the property cannot be classified as held for sale at the reporting
date as it is not available for sale immediately in its present condition.

(b) In case of Entity X’s plan to sell commercial building, it intends to transfer the commercial building to a
buyer after the occupant vacates the building and the time required for vacating such building is usual
and customary for sale of such non- current asset. Accordingly, the criterion of the asset being available
for immediate sale would be met and hence, the commercial building can be classified as held for sale at
the reporting date

MTPs QUESTIONS

NO QUESTION HAS BEEN ASKED IN MTPs till Oct. 21

11. 5