Background:
The Institute of Chartered Accountants of India (ICAI) has frequently observed discrepancies where financial reporting disclosures do not conform to statutory requirements or do not offer stakeholders a transparent depiction. Listed below are several identified deficiencies in reporting practices concerning Asset held for Disposal (Ind As 105):
Shortcomings: IND AS 105 “Asset held for Disposal”
| S. No. | Observation(s) | Remarks |
| 1. | Company possessing assets held for sale are not presented separately in the financial statement. | Paragraph 38 of IND AS 105 require that company shall distinctly segregate and present a non – current asset designated as held for sale, along with the assets of a disposal group categorised as held for sale, from other assets on the balance sheet. |
| 2. | Company has not specified the reasons for assets classified as held for sale. | Para 30 of IND AS 105 mandates company to present and disclose information that allow users to assess the financial impact of non -current assets held for sale. Additionally, company shall disclose the following information in the note: a) Description of assets held for sale. b) Description of sale circumstances, i.e. manner and timing of disposal. |
| 3. | Asset classified as held for sale continued to be presented at same value in the balance sheet over the years without any specified reason. | Paragraph 15 of IND AS 105 outlines that a company shall measure the non- current assets held for sale or disposal group classified as held for sale at lower of its: Carrying amountFair value less costs to sell. |
| SW Remarks: Companies must comply with the statutory requirement outlined above to ensure precise reporting consistent with standards, enhancing transparency and credibility in their financial statements. |
Abhishek Prasad Audit Associate, SW
