Carrying amount before reclassification

Learning objectives

• Calculate the carrying amount at the date of classification by first applying the applicable Standards (depreciation up to that date, impairment).L2, L3

Normative references

• IFRS 5 §18Immediately before the initial classification as held for sale, the carrying amounts of the asset (or of all the assets and liabilities in the disposal group) are measured in accordance with the applicable IFRSs.

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

3 questions

• Quentel acquired a machine at a cost of {cost}, with a residual value of {residual_value} and a useful life of {useful_life} years, depreciated on a straight-line basis. It classifies it as held for sale after {months_until_classification} months of use. Calculate accumulated depreciation at the classification date, then the carrying amount at that date (no impairment otherwise).L2
• Rovan recognised depreciation on a press up to 31 March. It classifies it as held for sale on 30 June. The depreciable amount is {depreciable_amount}, the useful life {useful_life} years (straight-line) and {months_since_last_entry} months have elapsed since the last charge. Post the entry for the last depreciation charge before classification.L2
• On 30 June, Pernal classifies a machine as held for sale. Its carrying amount at the last closing was €650,000; depreciation for the last months, not yet recognised, is €30,000. Case assumption: fair value less costs to sell is €635,000. Which conclusion is consistent?L3