IPSAS 44
Active
Non-current Assets Held for Sale and Discontinued Operations
Specifies accounting for assets held for sale and presentation/disclosure of discontinued operations, requiring held-for-sale assets to be measured at the lower of carrying amount and fair value less costs to sell and presented separately. Effective 1 January 2025.
Active Standard
IPSAS 44 Non-current Assets Held for Sale and Discontinued Operations is the current, active standard issued by the IPSASB for accounting for assets held for sale and presentation/disclosure of discontinued operations. Effective for periods beginning on or after 1 January 2025. Earlier application requires simultaneous adoption of IPSAS 43.
IPSAS 44 is drawn primarily from IFRS 5 Non-current Assets Held for Sale and Discontinued Operations for the public sector, retaining the lower-of carrying amount and fair value less costs to sell measurement, the highly probable test, and the discontinued operation presentation framework while adding public-sector-specific distinctions between acquisitions and amalgamations (IPSAS 40) for newly-acquired assets.
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Objective, Scope & Disposal Groups (paras. 1–8)
Objective
Specifies accounting for assets held for sale, and presentation/disclosure of discontinued operations. Requires held-for-sale assets to be measured at the LOWER of carrying amount and fair value less costs to sell (with depreciation ceasing), and presented SEPARATELY on both the SOFP and SOFPerformance.
Applies to ALL recognized non-current assets and disposal groups for classification/presentation; measurement requirements apply to the SAME population, except specific carve-outs (§1 right).
Measurement carve-outs (para. 6) & disposal groups
Deferred tax assets Employee benefit assets (IPSAS 39) Financial assets (IPSAS 41) Investment property under IPSAS 16's fair value model Biological assets at fair value less costs to sell (IPSAS 27) Insurance contract groups
A DISPOSAL GROUP (a group of assets, possibly with directly associated liabilities, disposed of together) is measured as a WHOLE at the lower of carrying amount and fair value less costs to sell – even where it includes current assets/liabilities or carve-out assets (para. 5). The SAME classification/presentation/measurement rules apply to assets held for DISTRIBUTION TO OWNERS (para. 7).
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Definitions (paras. 9, 40)
Core vocabulary
Costs to sell
Incremental costs directly attributable to disposal, excluding finance costs and income tax expense.
Cash-generating unit
The smallest identifiable group of assets, held for a commercial return, generating largely independent cash inflows – imported directly from IPSAS 26.
Component of an entity
Operations and cash flows clearly distinguishable, operationally and for financial reporting, from the rest of the entity.
Discontinued operation – three qualifying paths (paras. 41)
Represents a SEPARATE MAJOR operation or geographical area of operations Is part of a SINGLE COORDINATED PLAN to dispose of a separate major operation or geographical area Is a CONTROLLED ENTITY acquired EXCLUSIVELY with a view to resale
A discontinued operation is a component that has EITHER been disposed of, OR is classified as held for sale, AND meets one of the three tests above.
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Classification – the "Highly Probable" Test (paras. 11–18)
The core rule, and what "highly probable" requires (para. 11–13)
Classify as held for sale if carrying amount will be recovered PRINCIPALLY through a sale transaction, rather than continuing use
Available for IMMEDIATE sale in present condition, subject only to usual/customary terms Appropriate management level COMMITTED to a plan to sell, with an ACTIVE program to locate a buyer ACTIVELY MARKETED at a price reasonable relative to current fair value Sale expected to complete within ONE YEAR of classification (with a narrow extension exception, para. 15) Unlikely the plan will change significantly or be withdrawn
Distinctive public sector footnote: obtaining REGULATORY approval to sell assets is common in the public sector – the probability of owners'/regulatory approval (where required) is explicitly factored into the highly-probable assessment (para. 13, footnote 4).
Special cases
Loss-of-control sale plan for a controlled entity → classify ALL its assets/liabilities as held for sale once criteria are met, REGARDLESS of any retained non-controlling interest (para. 14) Exchanges of non-current assets WITH commercial substance (IPSAS 45 sense) count as sale transactions (para. 16) Newly acquired assets → classify at ACQUISITION only if the one-year test is met AND other criteria are highly probable within a short period (usually 3 months) afterward (para. 17) Criteria met AFTER period-end but BEFORE statements are authorized for issue → don't reclassify retroactively, but DISCLOSE key facts in the notes (para. 18)
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Assets to Be Abandoned & Held for Distribution to Owners (paras. 19–21)
Abandoned assets – NEVER classified as held for sale
An asset to be ABANDONED is never classified as held for sale – its carrying amount will be recovered through CONTINUING use, not a sale (para. 20).
EXCEPTION: if the disposal group being abandoned meets the discontinued-operation criteria, its results/cash flows ARE presented as discontinued operations – but only from the date it CEASES to be used (para. 20). Temporarily taken-out-of-use assets are never treated as abandoned (para. 21).
Held for distribution to owners
Classified when the entity is COMMITTED to distribute the asset to owners – available for immediate distribution AND highly probable
Same "highly probable" logic as a sale (§3): actions initiated, expected completion within one year, unlikely to change/withdraw, with owners'/regulatory approval probability factored in (para. 19).
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Measurement of Held-for-Sale Assets (paras. 22–27)
The core rule – lower of two amounts
Held for sale → lower of CARRYING AMOUNT and FAIR VALUE LESS COSTS TO SELL
Held for distribution to owners → lower of carrying amount and FAIR VALUE LESS COSTS TO DISTRIBUTE
Costs to sell beyond ONE YEAR are measured at PRESENT VALUE; any increase from the passage of time is a FINANCING COST in surplus or deficit (para. 25).
Newly acquired assets – the combination-type distinction
Acquired via a public sector ACQUISITION (IPSAS 40) → measured at FAIR VALUE LESS COSTS TO SELL only Acquired via a public sector AMALGAMATION (IPSAS 40) → the ORDINARY lower-of test applies (carrying amount vs. fair value less costs to sell) – reflecting the amalgamation model's carrying-amount basis rather than fair value (para. 24)
Immediately BEFORE initial classification, carrying amounts are measured per the applicable IPSAS as normal (para. 26). On subsequent remeasurement of a disposal group, carve-out items (§1) are remeasured under THEIR OWN Standards first, before the group's fair value less costs to sell is remeasured (para. 27).
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Recognition of Impairment Losses & Reversals (paras. 28–33)
Write-downs and gains – capped by cumulative prior losses
Any write-down to fair value less costs to sell → IMPAIRMENT LOSS
Any subsequent increase → GAIN, capped at cumulative impairment previously recognized (under this Standard, IPSAS 21, or IPSAS 26)
For a disposal group, the loss/gain is allocated across the group's in-scope assets using IPSAS 26's OWN allocation order (paras. 91(a)-(b), 110 – mirroring the goodwill-first waterfall from that Standard's poster) (para. 31).
No depreciation while held for sale, and derecognition timing
An asset is NEVER depreciated/amortized while classified as held for sale (or part of a held-for-sale disposal group) – though interest and other expenses on disposal-group LIABILITIES continue as normal (para. 33). Any gain/loss not yet recognized by the sale date is recognized AT DERECOGNITION, per IPSAS 45 (PP&E) or IPSAS 31 (intangibles) (para. 32).
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Changes to a Plan of Sale or Distribution (paras. 34–38)
Sale ↔ distribution switch – a continuation, not a reversal
Reclassifying DIRECTLY between held-for-sale and held-for-distribution-to-owners is treated as a CONTINUATION of the original disposal plan – apply the new method's classification/presentation/measurement rules, but do NOT reset the original classification date, and don't follow the ceases-to-qualify mechanics below (para. 35).
Genuinely ceasing to qualify – the reclassification-back formula
Measure at the LOWER of: (a) carrying amount BEFORE classification, adjusted for depreciation/amortization/revaluations that WOULD have been recognized had it never been classified held for sale; and (b) RECOVERABLE AMOUNT at the date of the decision not to sell/distribute
Effectively "catches up" the missed depreciation, capped by whatever the asset would actually be worth today under an impairment test (paras. 34, 36).
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Presentation on the Statement of Financial Position (paras. 48–50)
Separate line items – no offsetting, no retrospective restatement
Held-for-sale ASSETS presented SEPARATELY from other assets Disposal-group LIABILITIES presented SEPARATELY from other liabilities Assets and liabilities are NEVER offset into a single net amount MAJOR CLASSES disclosed separately (face or notes) – except for newly-acquired-controlled-entity disposal groups (para. 49) Cumulative net-assets/equity amounts related to the held-for-sale item presented SEPARATELY (para. 48)
Prior-period SOFP amounts are NEVER reclassified/represented to reflect the latest period's held-for-sale classification (para. 50) – unlike discontinued operations in the SOFPerformance, which ARE re-presented (§9).
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Discontinued Operations – Presentation (paras. 42–47)
A single SOFPerformance amount, with a mandatory analysis
One line = post-tax surplus/deficit of discontinued operations + post-tax gain/loss on measurement/disposal
Broken into: revenue, expenses, pre-tax surplus/deficit; related income tax; the gain/loss on measurement/disposal; and ITS related tax – presentable in notes OR a dedicated SOFPerformance section CLEARLY separated from continuing operations (para. 42). Also required: net cash flows by activity (operating/investing/financing), and revenue split between continuing/discontinued attributable to controlling-entity owners (para. 42(c)-(d)).
Re-presentation, and later adjustments
PRIOR periods are RE-PRESENTED so disclosures reflect ALL operations discontinued by the LATEST period's end (para. 43) – the mirror opposite of §8's SOFP rule Later-period adjustments directly related to a PRIOR period's discontinued disposal (purchase price adjustments, indemnification resolution, retained environmental/warranty obligations) → classified SEPARATELY within discontinued operations, with nature/amount disclosed (para. 44) If a component CEASES to be classified as held for sale, ITS results are RECLASSIFIED and included in continuing operations for ALL periods presented (para. 45)
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Additional Disclosures & Fair Value Disclosures (paras. 51–55)
Per classification/sale period (para. 51–53)
A DESCRIPTION of the asset (or disposal group) Facts/circumstances of the sale, or leading to the expected disposal – expected MANNER and TIMING The gain/loss recognized, and its SOFPerformance caption if not separately shown The SEGMENT (IPSAS 18) it's presented in, if applicable If materially LOWER carrying amount than fair value → disclose the fair value If a plan change occurs → facts/circumstances and the EFFECT on results, current and prior periods
Fair value hierarchy disclosures – the familiar package
Mirrors the fair value disclosure packages seen throughout this library: measurement techniques and inputs for assets/liabilities measured at fair value AFTER initial recognition – helping users assess how those measurements were developed (paras. 54–55).
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Effective Date, Amendment Timeline & Transition (paras. 58–61)
Amendment history at a glance
Base Standard: periods beginning on/after 1 January 2025 – earlier application requires SIMULTANEOUS adoption of IPSAS 43, Leases (para. 58). Applied PROSPECTIVELY to assets/disposal groups meeting the held-for-sale/discontinued-operation criteria from the effective date forward (para. 60).
EffectiveChange
1 Jan 2025Paras. 16, 32, 37 – IPSAS 45, Property, Plant, and Equipment (May 2023)
IPSAS 44 is another member of the 2022–2023 companion-Standard wave (alongside 43, 45, 46) all sharing the 1 January 2025 effective date.
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Relationship to IAS/IFRS – Comparison with IFRS 5
Comparison – IPSAS 44 vs IFRS 5
IPSAS 44 is drawn primarily from IFRS 5 (issued 2004, amendments to May 2017), Non-current Assets Held for Sale and Discontinued Operations.
TopicDifference
Fair value disclosure triggerIPSAS 44 REQUIRES notes disclosure of fair value when materially different from carrying amount; IFRS 5 has no equivalent explicit trigger
Cash-generating unit definitionIPSAS 44 imports the IPSAS 26 definition directly, rather than IFRS 5's own
Public sector combinationsIPSAS 44 distinguishes ACQUISITIONS from AMALGAMATIONS (IPSAS 40) – newly-acquired amalgamation assets held for sale use the LOWER-OF test, not straight fair value less costs to sell (§5); IFRS 5 has no equivalent since business combinations are always acquisition-method
Terminology"Operation," "public sector combination," "revenue," "owner," "controlling entity," "controlled entity" (IPSAS 44) vs "business," "business combination," "income," "shareholder," "parent," "subsidiary" (IFRS 5)
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Statement / Process Mapping
Classification decision map
- Will carrying amount be recovered PRINCIPALLY through sale, not continuing use? Is it being ABANDONED instead? → abandoned assets are NEVER held for sale (§3, §4)
- Apply the HIGHLY PROBABLE test – available for immediate sale, committed management plan, active marketing, expected completion within one year (§3)
- Classify: measure at the LOWER of carrying amount and fair value less costs to sell (or costs to distribute); STOP depreciating immediately (§5, §6)
- Present SEPARATELY on the SOFP – assets and liabilities each in their own line, never offset, prior periods NOT restated (§8)
- Does the disposed/held-for-sale component meet the DISCONTINUED OPERATION test (major operation, coordinated disposal plan, or resale-only acquisition)? → present as a single SOFPerformance line with a full analysis, prior periods RE-PRESENTED (§9)
- Criteria no longer met? → reclassify BACK at the lower of adjusted-original-carrying-amount and recoverable amount (§7)
Concept-to-statement mapping table
IPSAS 44 conceptStatement(s)Notes
Held-for-sale asset/disposal group carrying amountSOFPSeparate line, never offset with liabilities
Impairment loss/gain on held-for-sale measurementSOFPerfCapped at cumulative prior impairment
Discontinued operations resultSOFPerfSingle line, analyzed in notes or a dedicated section
Discontinued operations cash flowsCash FlowBy operating/investing/financing activity
Reclassification-back adjustmentSOFP SOFPerfCatch-up depreciation, capped at recoverable amount
Description, facts/circumstances, fair valueNotesMandatory disclosures, paras. 51–55
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Related Standards – Cross-Reference Map
How IPSAS 44 connects across the IPSAS body of literature
StandardNature of the connection
IPSAS 1General disclosure principles supplement this Standard's specific requirements where needed (§1)
IPSAS 18Segment disclosure for held-for-sale assets/disposal groups (§10)
IPSAS 21 / 26Impairment loss cap methodology, and the cash-generating-unit definition/allocation order imported directly (§2, §6)
IPSAS 31Derecognition mechanics for intangible assets within a disposal group (§6)
IPSAS 39 / 41Scope carve-outs from this Standard's measurement requirements (§1)
IPSAS 40The acquisition/amalgamation distinction drives newly-acquired-asset measurement (§5)
IPSAS 43Simultaneous early-adoption requirement (§11)
IPSAS 45Derecognition mechanics for PP&E within a disposal group; commercial substance definition for qualifying exchange transactions (§3, §6)
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Quick-Reference Glossary
Disposal group
A group of assets, possibly with directly associated liabilities, disposed of together in a single transaction.
Costs to sell
Incremental costs directly attributable to disposal, excluding finance costs and income tax expense.
Component of an entity
Operations and cash flows clearly distinguishable, operationally and for financial reporting, from the rest of the entity.
Discontinued operation
A disposed-of or held-for-sale component representing a major operation, geographical area, or resale-only acquisition.
Financial statement key
SOFP Statement of financial position
SOFPerf Statement of financial performance
Notes Notes to the financial statements