Revision question on IFRS 5 – Non current asset held for sale and discontinued operations.

Sofoline Ltd has a plant which cost TZS 40,000 and was purchased on 1 January 2013 with a useful life of 10 years. The plant was being used as part of its business operating capacity. On 30 June 2015, Sofoline Ltd made a decision to classify the plant as held for sale and an agent was appointed for the sale of the plant that have started advertising the plant at a selling price of TZS 29,000 which was considered to be its fair value. The selling expenses are estimated to be TZS 1,500. The asset has not yet been sold by the year end of 31 December 2015 and it has a fair value less cost to sell of TZS 24,000 on this date.

Required:

Discuss how this will be accounted for in the financial statements of Sofoline Ltd for the yearended 31 December, 2015 in accordance with IFRS 5 Non-current Assets Held for Sale andDiscontinued Operations

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