Held for sale asset - IFRS 5

Dec 16, 2017
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United Arab Emirates
We have a case where the holding company is on talks to sell of a subsidiary company. The sale is subject to regulatory approval as well as shareholder approval of the acquiring company.

As of now the steps required for completing the sale is underway.

Is it required to show this subsidiary's fair value as a held for sale asset and de-consolidate from the holding company's consolidated financials?

My view is that since the transaction is to be approved by the regulatory authority as well as the shareholders, it is not possible to conclude that the sale is highly probable.

I would appreciate your views on this.



VIP Member
Oct 12, 2011
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United States
I don't agree. We have had similar instances in the past and unless there is concern that the deal will not be approved you should hold at FV less costs to sell. I don't know your particular business or regulation but your legal team should be able to make an assessment what the likelihood is around this deal and how unlikely it would be to be disallowed.

A sale is ‘highly probable’ where: there is evidence of management commitment (check); there is an active program to locate a buyer and complete the plan (check); the asset is actively marketed for sale at a reasonable price (check); and the sale will normally be completed within 12 months from the date of classification (probably check if approved). Guidance does not imply that it must be certain - just highly probable and depends on your own internal assessment with external auditor agreeement.


Feb 5, 2019
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remember also that:
1/ you keep consolidating a subsidiary that is classified as held for sale (you just present it differently) and
2/ non-current assets/disposal groups classified as held for sale are measured at the lower of carrying value and fair value less costs to sell, so if the fair value less costs to sell is higher than the carrying amount, you do not use fair value

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