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Financial Reporting · Ind AS 105 Non-current Assets Held for Sale and Discontinued Operations

Differences between Ind AS 105 and IFRS 5

Updated 5 October 2026 · Fact-checked

Ind AS 105 is largely aligned with IFRS 5. Appendix 1 of the current text lists the differences; examples include Indian terminology and omitted IFRS effective-date and transition text, but this is not a verified complete list. Held for distribution to owners is in both. Learn Appendix 1 from the current text and name each difference with its reason.

Understand Differences between Ind AS 105 and IFRS 5

Ind AS 105 is the Indian version of IFRS 5. Both cover non-current assets and disposal groups held for sale, assets held for distribution to owners, and discontinued operations. The core rules are the same: classify when the carrying amount will be recovered mainly through sale, measure at the lower of carrying amount and fair value less costs to sell, and stop depreciation.

The measurement rules do not cover every asset. They do not apply to certain assets, such as deferred tax assets, assets arising from employee benefits, financial assets within Ind AS 109, and contractual rights under insurance contracts. These are measured under their own standards even if they are part of a disposal group. Buildings, plant and investment property carried at cost are within the measurement rules.

Every Ind AS carries an Appendix 1 called "Comparison with IFRS". It tells you where the Indian standard departs from the IFRS text. For Ind AS 105 the core requirements are aligned, so the topic is easy to score on if you know what to say and, just as important, what not to say. Learn the actual Appendix 1 from the current Ind AS 105 text. Do not rely on a memorised short list as if it were complete.

Examples of differences you may meet are given below. This list is illustrative. It has not been checked against the full Appendix 1 and should not be read as the main or complete set of differences.

  • Terminology. Ind AS uses its own terms, such as "balance sheet" and "statement of profit and loss", where IFRS uses "statement of financial position" and "statement of comprehensive income". Cross-references also point to Ind AS numbers, not IAS or IFRS numbers.
  • Text that is not carried over. IFRS effective-date and transition paragraphs are not relevant to Indian reporting and are omitted.

There is also a related point that comes from another standard, not from Ind AS 105 itself. IFRS 5 carves out of its measurement rules investment property carried at fair value under IAS 40. Ind AS 105 does not itself differ here. That IFRS exclusion is not relevant to Ind AS entities because Ind AS 40 Investment Property allows only the cost model. So investment property of an Ind AS entity that meets the held-for-sale criteria is measured under Ind AS 105. Do not present this as a separate Appendix 1 difference.

The point students lose marks on is the opposite one. Held for distribution to owners (the IFRIC 17 content) is part of both Ind AS 105 and IFRS 5. It is not an Indian carve-out. Always check the exact wording of Appendix 1 in the current Ind AS 105 text before the exam.

Key rules to remember

Measurement of a held-for-sale asset or disposal group
Lower of (carrying amount, fair value less costs to sell)
Same in Ind AS 105 and IFRS 5. It applies to assets within the measurement scope; deferred tax assets, employee benefit assets, financial assets within Ind AS 109 and insurance contract rights are measured under their own standards. Write this first when a question asks about a difference, to show what is common.
Measurement of an asset held for distribution to owners
Lower of (carrying amount, fair value less costs to distribute)
Included in both Ind AS 105 and IFRS 5. Not a difference.
Impairment loss on classification
Carrying amount − (fair value − costs to sell), if carrying amount is higher
Recognised in profit or loss. Depreciation stops from the date of classification.
Investment property difference
Ind AS 40: cost model only → IFRS 5's fair-value-model exclusion is not relevant to Ind AS entities
Ind AS 105 does not itself differ here. IFRS allows the fair value model under IAS 40, and IFRS 5 excludes such property from its measurement rules. Ind AS 40 allows no fair value model, so the point is a consequence of Ind AS 40, not a distinct Appendix 1 difference. Investment property at cost is within the Ind AS 105 measurement rules.
Difference answer template
Ind AS 105 | IFRS 5 | Reason
State the Ind AS position, the IFRS position, and the reason, in one line each.

How to solve Differences between Ind AS 105 and IFRS 5 questions

Use this method for any question that asks you to compare Ind AS 105 with IFRS 5 or to apply the difference to a case.

  1. 1Read the question and decide whether it asks for a difference, a similarity, or a measurement under Ind AS 105.
  2. 2If it asks for differences, list the points given in Appendix 1 of the current Ind AS 105 text, such as terminology and omitted IFRS transition and effective-date text. Do not claim your list is exhaustive.
  3. 3For each point, write the Ind AS 105 position, the IFRS 5 position and the reason in one line each.
  4. 4If the case has an investment property, state that Ind AS 40 allows only the cost model, so the IFRS fair-value-model exclusion is not relevant, and Ind AS 105 measurement applies once it meets the held-for-sale criteria.
  5. 5If the case has a distribution to owners, apply the held-for-distribution criteria and measure at the lower of carrying amount and fair value less costs to distribute. Say this is common to IFRS 5.
  6. 6Do the numbers: compute fair value less costs to sell, compare with the carrying amount, and show any impairment loss.
  7. 7Conclude in one sentence that the core requirements are aligned and the differences are limited to those in Appendix 1.

Quickest way: Recall frame for Appendix 1

When to use it: Use this for a short-answer or MCQ question asking what differs between Ind AS 105 and IFRS 5.

  1. Start with the examples you know: terminology, and omitted IFRS transition and effective-date text. Then check them against the current Ind AS 105 Appendix 1, because this is only an illustrative list and not a complete one.
  2. Add the consequence line: Ind AS 40 allows only the cost model, so the IFRS fair-value-model exclusion is not relevant to Ind AS entities.
  3. Add the safety line: held for distribution to owners is in both, so it is not a difference.
  4. Write one line for each point with the reason. Do not invent extra carve-outs.

Common mistakes in Differences between Ind AS 105 and IFRS 5

  • Saying held for distribution to owners is an Ind AS carve-out or is missing in IFRS 5.

    Students see the topic in Ind AS 105 and assume it is Indian-specific.

    Fix: Remember that IFRS 5 also covers it after IFRIC 17. Treat it as a similarity.

  • Listing many invented differences to fill the answer.

    Students assume every Appendix 1 has a long list.

    Fix: Give only the points you can find in Appendix 1 of the current Ind AS 105 text and say the standards are otherwise aligned.

  • Applying the IFRS fair value model for investment property in a case.

    Students carry over IAS 40 knowledge.

    Fix: Under Ind AS 40 only the cost model is allowed. Use the carrying amount at cost less depreciation and impairment. Such property is within the Ind AS 105 measurement rules, unlike items such as deferred tax assets, employee benefit assets and financial assets within Ind AS 109.

  • Continuing depreciation after classification as held for sale.

    Students focus on the comparison and forget the base rule.

    Fix: Stop depreciation from the date of classification. This is the same in both standards.

  • Using IFRS terms such as statement of financial position in Ind AS answers.

    Mixing IFRS reading with Ind AS exam answers.

    Fix: Use Ind AS terms: balance sheet and statement of profit and loss.

  • Treating a memorised short list such as terminology, cost model and omitted text as the complete Appendix 1.

    Mnemonics feel complete, so students stop checking the standard.

    Fix: Use any mnemonic only as a starting point and read the current Appendix 1 of Ind AS 105 before the exam.

Worked examples

Example 1

Sigma Ltd (an Ind AS company) holds an office building as investment property at a cost-based carrying amount of ₹80,00,000. On 1 February the board commits to sell it, and all held-for-sale criteria are met on that date. Fair value is ₹78,00,000 and costs to sell are ₹1,50,000. A director says that, as under IFRS, investment property is outside the measurement rules of the standard, so no write-down is needed. Respond.

Show the solution
  1. The IFRS 5 exclusion applies to investment property carried at fair value under IAS 40. Ind AS 40 allows only the cost model, so Sigma Ltd has no such property and the exclusion is not relevant.
  2. The measurement rules of Ind AS 105 do not apply to some assets, such as deferred tax assets, employee benefit assets, financial assets within Ind AS 109 and insurance contract rights. A building carried at cost is none of these, so it is within scope.
  3. The building therefore falls under the Ind AS 105 measurement rules once it is classified as held for sale.
  4. Fair value less costs to sell = ₹78,00,000 − ₹1,50,000 = ₹76,50,000.
  5. Carrying amount ₹80,00,000 is higher than ₹76,50,000, so the asset is written down.
  6. Impairment loss = ₹80,00,000 − ₹76,50,000 = ₹3,50,000, recognised in profit or loss.
  7. Present the building as held for sale, stop depreciation, and make the required disclosures.

Answer: The director is wrong. Sigma Ltd recognises an impairment loss of ₹3,50,000 and carries the building at ₹76,50,000 as held for sale, because Ind AS 40 allows only the cost model and so the building is measured under Ind AS 105.

Example 2

Rao Ltd plans to distribute a machine to its owners as a non-cash dividend. The machine is available for immediate distribution in its present condition and the distribution is highly probable. Carrying amount is ₹50,00,000, fair value is ₹45,00,000 and costs to distribute are ₹1,00,000. A student writes that this is an Ind AS carve-out with no IFRS equivalent. Evaluate the claim and measure the machine.

Show the solution
  1. Held for distribution to owners is covered in both Ind AS 105 and IFRS 5, so it is not a carve-out.
  2. The machine meets the criteria, so it is classified as held for distribution to owners and depreciation stops.
  3. Fair value less costs to distribute = ₹45,00,000 − ₹1,00,000 = ₹44,00,000.
  4. The lower of ₹50,00,000 and ₹44,00,000 is ₹44,00,000.
  5. Write-down = ₹50,00,000 − ₹44,00,000 = ₹6,00,000, recognised in profit or loss.
  6. Present the machine separately as held for distribution to owners.

Answer: The claim is wrong because both standards cover it. The machine is measured at ₹44,00,000 and a loss of ₹6,00,000 is recognised.

Exam tips

  • Learn Appendix 1 from the current Ind AS 105 text as short points, and add one safety line that held for distribution to owners is common to both standards.
  • In case scenarios, check for investment property first. It is the most likely trigger for the Ind AS 40 cost model point.
  • Show the numbers in a table-like list in the answer: carrying amount, fair value less costs to sell, lower figure, loss.
  • Do not write section or paragraph numbers unless you are sure of them. Marks go to the correct point and reason.
  • In MCQs, reject options that call a feature found in both standards an Indian carve-out.

Practice questions from Ind AS 105 Non-current Assets Held for Sale and Discontinued Operations

Differences between Ind AS 105 and IFRS 5: frequently asked questions

Are there many differences between Ind AS 105 and IFRS 5?

No. The core recognition and measurement rules are aligned. Examples of differences are terminology and the omission of IFRS effective-date and transition text, but these are illustrative and not a verified complete list. Check the current Appendix 1 for the full list.

Is held for distribution to owners different in Ind AS 105?

No. Both Ind AS 105 and IFRS 5 cover assets held for distribution to owners. It is a feature of the standard, not a difference from IFRS.

Why does the investment property point matter?

Ind AS 105 does not itself differ here. IFRS 5 excludes investment property at fair value under IAS 40 from its measurement rules, but Ind AS 40 allows only the cost model, so that exclusion is not relevant to Ind AS entities. Cost-model investment property that is held for sale is measured under Ind AS 105. Other assets, such as deferred tax assets and financial assets within Ind AS 109, stay outside those measurement rules.

Should I memorise paragraph numbers for Appendix 1?

Not necessarily. Examiners reward the correct difference with its reason. Check the latest Ind AS 105 text once before the exam so your list is complete.