Impairment of assets held for sale
Entity A decided to sell a group of three assets in one transaction to the same acquirer. Each asset had been part of a different CGU. The decision to sell was made on 20 December 2012, just prior to Entity A’s year end of 31 December. The assets met IFRS 5’s requirements for classification as a disposal group on 10 January 2013.
The information about the carrying amounts and fair values less cost of disposal of individual assets at 20 December 2012 and the disposal group on 10 January 2013 is summarised below. There was no change in the fair values of these assets between the two dates.
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Carrying amount €
FVLCD of separate assets
Aggregate of the lower of the carrying
€ Fair value of the group
Although these assets were classified as held for sale subsequent to the year end, the decision to sell them was an indicator of impairment. Accordingly, it is necessary to determine whether the three assets together comprise a new CGU. If so, impairment would be assessed on the three assets together, prior to reclassification and remeasurement under IFRS 5.
If the three assets together do not comprise a CGU, they would have to be tested for impairment individually at the year end, which would result in an impairment loss on Asset X of €300. As there is no change in the recoverable amount between the year end and immediately before the classification under IFRS 5, the aggregate value of these assets prior to classification under IFRS 5 would be €12,400 (4,300 + 5,700 + 2,400). The FVLCD of the disposal group at the date of the first application of IFRS 5 (10 January 2013) is €12,600. Therefore according to the measurement criteria under IFRS 5 the carrying amount of the disposal group remains at €12,400 and the impairment loss previously recognised on Asset X would only be reversed, should the FVLCD of the disposal group exceed €12,600.