Held for sale disposal group

Generally 1 mark per comment on matter/financial statement risk/evidence point:

– Identify ‘Treasured Homes’ as a disposal group per IFRS 5
– Explain why meets criteria for treatment as a disposal group
– Assets should be presented separately and tested for impairment
– Financial statement risk is overvalued assets and incorrect presentation
– Identify ‘Treasured Homes’ as a discontinued operation per IFRS 5
– Financial statement risk is incorrect presentation of its results in SOCI and SOCF
– Consideration of materiality

Evidence:

– Review board minutes to confirm management’s commitment to the sale
– Inspect any documents relevant to the negotiation
– Inspect 2012 budgets to confirm ‘Treasured Homes’ not included 
– Obtain and review management’s impairment test on the disposal group
– Confirm disclosures made according to IFRS 5 in draft financial statements

Maximum marks (max 8 marks each issue) 16