Adjustment in profit from continuing operations

Learning objectives

• Explain where the adjustment to the carrying amount on cessation of the classification is presented (profit or loss from continuing operations).L3

Normative references

• IFRS 5 §28The adjustment to the carrying amount on ceasing the classification is included in profit or loss from continuing operations in the period in which the criteria are no longer met (for an asset revalued under IAS 16 or IAS 38 before classification, it is treated as a revaluation, footnote to para. 28); the financial statements for the periods since classification are amended if it is a subsidiary, joint operation, joint venture, associate, or a portion of an interest in a joint venture or an associate; the adjustment is presented in the same caption as the gain or loss in para. 37.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

2 questions

• An asset leaves the held-for-sale classification and its carrying amount is adjusted. Where is the adjustment presented?L3
• Yralen gives up selling a warehouse that was classified as held for sale for {months_classified} months. Its depreciable amount is {depreciable_amount} and its useful life {useful_life} years (straight-line). Case convention: the adjusted carrying amount remains below the recoverable amount. Post the entry adjusting for the depreciation not recognised.L3