Title: Navigating IFRS 5: Accounting for Non-current Assets Held for Sale and Discontinued Operations

IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations" is a critical standard in financial reporting, outlining the accounting treatment and disclosure requirements for non-current assets held for sale and for discontinued operations. This standard is designed to provide clarity and consistency in how entities report the impending sale of assets and changes in their business structure.

Key features of IFRS 5 include:

1. Classification of Non-current Assets as Held for Sale: IFRS 5 specifies the criteria for classifying a non-current asset as held for sale, including the asset being available for immediate sale and the sale being highly probable within one year.

2. Measurement of Assets Held for Sale: Once an asset is classified as held for sale, it should be measured at the lower of its carrying amount and fair value less costs to sell.

3. Presentation and Disclosure: IFRS 5 requires that assets classified as held for sale and the assets and liabilities of a discontinued operation be presented separately in the financial statements. Additionally, detailed disclosures are required to provide information about the assets, liabilities, income, and expenses related to discontinued operations and assets held for sale.

4. Discontinued Operations: This part of the standard deals with the reporting requirements for operations that an entity has discontinued or plans to discontinue.

The implementation of IFRS 5 brings several advantages:

- Enhanced Transparency: The separate presentation of assets held for sale and discontinued operations provides a clearer picture of an entity’s ongoing activities and those that are being phased out, aiding stakeholders in making more informed assessments.

- Comparability: By standardizing the treatment of assets held for sale and discontinued operations, IFRS 5 facilitates comparability across different entities’ financial statements.

- Improved Decision-Making: The disclosures required under IFRS 5 enable investors and other stakeholders to better understand the financial effects of sales and discontinuations, aiding in investment and other business decisions.

For businesses, applying IFRS 5 involves identifying assets and operations that meet the criteria for classification as held for sale or discontinued. This requires not only an understanding of the standard but also a strategic assessment of the entity’s operations and assets.

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