Ind AS 105
Active
Non-current Assets Held for Sale and Discontinued Operations
Prescribes the classification, measurement and presentation of non-current assets (or disposal groups) held for sale and discontinued operations, one of the most closely converged Ind AS standards relative to IFRS 5.
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Conceptual Framework Linkage
The same measurement-consequence philosophy as IFRS 5
Ind AS 105 applies the IDENTICAL Conceptual Framework logic as IFRS 5 – once an asset's carrying amount will be recovered principally through SALE rather than continuing use, its measurement basis must change to reflect that (lower of carrying amount and fair value less costs to sell, with depreciation ceasing). India's convergence approach carries this principle forward WITHOUT substantive modification.
HOW IND AS 105 MAPS TO THE FRAMEWORK
Faithful representation – continuing to depreciate an asset genuinely being marketed for imminent sale would misrepresent its expected recovery path – IDENTICAL rationale to IFRS 5 Relevance – separately presenting discontinued operations helps users forecast future performance – IDENTICAL rationale to IFRS 5 A genuinely close convergence – unlike Ind AS 103's common control carve-out, Ind AS 105 contains NO major substantive divergence from its IFRS counterpart
Ind AS 105 is a GOOD example of the Ind AS convergence programme working as originally intended – a NEAR-VERBATIM adoption of the global standard, reflecting the absence of any strong Indian-specific policy reason to diverge on this particular topic.
The core lower-of rule – identical to IFRS 5
Carrying amount post-classification = LOWER of carrying amount and fair value less costs to sell (FVLCTS)
This formula, and its underlying asymmetric prudence rationale, is IDENTICAL between Ind AS 105 and IFRS 5.
2
Scope & Applicability
What Ind AS 105 covers
Ind AS 105 applies to ALL recognised non-current assets and disposal groups – IDENTICAL scope to IFRS 5, including the SAME measurement scope exclusions (deferred tax assets, employee benefit assets, financial assets, investment property at fair value, biological assets at fair value less costs to sell).
No substantive scope divergence from IFRS 5 exists.
Key definitions you must know
Held for sale
The classification of a non-current asset whose carrying amount will be recovered principally through sale – IDENTICAL definition to IFRS 5.
Discontinued operation
A component representing a separate major line of business/geographical area, disposed of or held for sale – IDENTICAL definition to IFRS 5.
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Held for Sale – The 'Highly Probable' Criteria
Identical six-criteria test to IFRS 5
Management committed to a plan to sell Asset available for immediate sale in its present condition Active programme to locate a buyer initiated Sale highly probable, expected within one year Actively marketed at a reasonable price Unlikely significant changes to the plan will be made
This entire test is REPRODUCED verbatim from IFRS 5 – no substantive difference exists.
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Measurement of Held-for-Sale Assets
Identical mechanics to IFRS 5
Example 1: Held-for-sale write-down – an Indian company example
An Indian manufacturing company classifies a machine as held for sale, with carrying amount ₹1.2 crore, fair value ₹1.05 crore, and estimated costs to sell ₹5 lakh.
FVLCTS = 1,05,00,000 − 5,00,000 = ₹1,00,00,000
Impairment loss = 1,20,00,000 − 1,00,00,000 = ₹20,00,000, recognised immediately in profit or loss, depreciation ceasing thereafter – an IDENTICAL calculation to how the same facts would be treated under IFRS 5.
Impairment loss = 1,20,00,000 − 1,00,00,000 = ₹20,00,000, recognised immediately in profit or loss, depreciation ceasing thereafter – an IDENTICAL calculation to how the same facts would be treated under IFRS 5.
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Disposal Groups
Identical treatment to IFRS 5
The SAME held-for-sale criteria and measurement rules apply at the disposal group level, with any write-down allocated across non-current assets within the group, and assets/liabilities presented SEPARATELY (not offset) – IDENTICAL to IFRS 5.
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Discontinued Operations
Identical single-line presentation to IFRS 5
An entity presents a SINGLE amount on the face of the Statement of Profit and Loss comprising the post-tax profit/loss of discontinued operations, plus the post-tax gain/loss on measurement/disposal – IDENTICAL to IFRS 5's own requirement.
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Changes to a Plan of Sale
Identical reclassification treatment to IFRS 5
If held-for-sale criteria are no longer met, the asset is measured at the LOWER of its adjusted historical carrying amount and its recoverable amount at the reclassification decision date – IDENTICAL to IFRS 5.
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Presentation on the Face of the Statements
Identical presentation rules to IFRS 5
Held-for-sale assets/liabilities are presented SEPARATELY on the Balance Sheet, NOT restated in comparatives; comparative Statement of Profit and Loss/OCI information IS restated for discontinued operations – the SAME asymmetric treatment as IFRS 5.
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Disclosure Requirements
Identical disclosure requirements to IFRS 5
Analysis of the discontinued operations line item Net cash flows attributable to discontinued operations Description of held-for-sale assets/disposal groups and expected timing Impairment loss recognised and its presentation location
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Critical Judgments & Estimates
Where management judgement matters most
SIGNIFICANT JUDGEMENTS
Whether a sale is genuinely "highly probable" – identical judgement to IFRS 5 Whether a component is a "separate major line of business or geographical area"
SIGNIFICANT ESTIMATES
Fair value less costs to sell
No genuinely INDIA-SPECIFIC judgement considerations distinguish Ind AS 105 from IFRS 5 in this area – the judgements involved are essentially identical.
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Ind AS 105 vs IFRS 5 – Full Comparison
Comprehensive comparison table
FeatureIFRS 5Ind AS 105
Held-for-sale classification criteriaSix-part "highly probable" testIDENTICAL – no substantive divergence
Measurement (lower of carrying amount and FVLCTS)Standard ruleIDENTICAL
Discontinued operations presentationSingle line, post-tax, comparatives restatedIDENTICAL
Terminology"Statement of financial position," "IFRS""Balance Sheet," "Ind AS" – Companies Act-aligned terminology only
Ind AS 105 is, alongside Ind AS 102, one of the standards MOST closely converged with its global IFRS counterpart – the only differences are TERMINOLOGICAL, reflecting Companies Act, 2013 conventions rather than any substantive accounting divergence.
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Statement Mapping
Comprehensive event-to-statement mapping table
Event / transactionStatement(s) affectedNotes
Classification as held for sale – write-downP&L Balance SheetIdentical to IFRS 5
Discontinued operation single-line presentationP&LComparatives restated
Held-for-sale assets/liabilities presentationBalance SheetSeparate line items, not offset
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Related Standards
Cross-reference map
StandardConnection
IFRS 5The GLOBAL counterpart standard, near-identically converged
Ind AS 16 / Ind AS 38 / Ind AS 40Supply the carrying amount at classification; depreciation/amortisation ceases per these standards' interaction with Ind AS 105
Ind AS 33Requires separate EPS disclosure for discontinued operations
Quick-reference glossary
Highly probable (Ind AS 105)
The significantly higher-than-"probable" threshold determining held-for-sale classification, identical to IFRS 5's own definition.
Costs to sell
Incremental costs directly attributable to disposal, excluding finance costs and income tax – identical to IFRS 5.
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Glossary
Held for sale
The classification of a non-current asset whose carrying amount will be recovered principally through sale – IDENTICAL definition to IFRS 5.
Discontinued operation
A component representing a separate major line of business/geographical area, disposed of or held for sale – IDENTICAL definition to IFRS 5.
Highly probable
The significantly higher-than-'probable' threshold determining held-for-sale classification, identical to IFRS 5's own definition.
Costs to sell
Incremental costs directly attributable to disposal, excluding finance costs and income tax – identical to IFRS 5.
Financial statement key
BS Balance sheet
IS Income statement
SE Statement of changes in equity
OCI Other comprehensive income
SCF Statement of cash flows