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

Sunrise Textiles Ltd, an Ind AS reporting company, is preparing a note on how Ind AS 105 differs from IFRS 5. A finance trainee states that Ind AS 105 has added a clarification to the held-for-sale classification conditions. Which clarification, as stated in the Comparison with IFRS 5 in Ind AS 105, is correct?

Ind AS 105 adds a clarification to paragraph 7 that a non-current asset or disposal group cannot be classified as held for sale if the entity intends to sell it in a distant future. The other statements are not part of the standard's text.

  1. AA non-current asset cannot be classified as held for sale if the entity intends to sell it in a distant futureCorrect
  2. BA non-current asset must be classified as held for sale if it is expected to be sold within five years
  3. CA non-current asset held for sale must always be measured at its original cost
  4. DA non-current asset can be classified as held for sale only if a buyer has already paid the full price

Explanation

The comparison with IFRS 5 notes that paragraph 7 of Ind AS 105 carries an added clarification: an asset or disposal group cannot be classified as held for sale if the entity intends to sell it in a distant future. The other options invent conditions (five years, cost measurement, full payment) that do not appear in the text.

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