End of depreciation

Learning objectives

• Determine the last depreciation charge and the cessation of depreciation once the asset is classified as held for sale.L1, L2

Normative references

• IFRS 5 §25A non-current asset is not depreciated (or amortised) while it is classified as held for sale or while it is part of a disposal group so classified; interest and other expenses attributable to the liabilities of such a group continue to be recognised.

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

3 questions

• A non-current asset classified as held for sale continues to be depreciated until its disposal.L1
• Maurel depreciates a packaging line on a straight-line basis; its depreciable amount is {depreciable_amount} and its useful life {useful_life} years. It classifies it as held for sale after {months_until_classification} months of use. Calculate accumulated depreciation at the classification date, then the annual charge that stops being recognised after classification.L2
• On 30 September, Brivel classifies as held for sale a machine whose net carrying amount, after the last depreciation charge, is {net_carrying_amount}. Case convention: fair value less costs to sell is higher, so there is no loss. Post the reclassification entry.L2