Public Versus Private – What Does IFRS Say?

IFRIC (International Financial and Reporting Interpretations Committee) recently examined how IFRS 5 Non-current Assets Held for Sale and Discontinued Operations should apply when a disposal plan is intended to be achieved by means of an initial public offering, but the prospectus to make that happen hasn't yet been approved by the securities regulator. Specifically, the group was asked "to clarify whether the disposal group would qualify as held for sale before the prospectus is approved by the securities regulator, assuming that all of the other criteria in IFRS 5 have been fulfilled."

Analyzing IFRS 5

IFRIC decided not to add the issue to its agenda, on the basis that the standard already contains sufficient guidance. Applying the IFRS 5 "held for sale" criteria in this situation, some of them relate to conditions that must already have occurred – for example, the appropriate level of management which must be committed to a plan to sell the asset or disposal