Abandoned assets

Learning objectives

• Distinguish an asset that is to be abandoned from an asset that is to be sold.L2, L3

Normative references

• IFRS 5 §13An asset (or disposal group) that is to be abandoned is not classified as held for sale, because its carrying amount will be recovered through use; if the disposal group to be abandoned meets para. 32(a) to (c), its results and cash flows are presented as discontinued operations at the date on which it ceases to be used. This covers assets to be used to the end of their economic life and assets to be closed rather than sold.

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

1 question

• An asset that the entity plans to abandon at the end of its use is classified as held for sale as soon as the decision to abandon is taken.L2