Recognition of the Power Plant as a Non-Current Assets Held for Sale

Abstract

XYZ (Pvt) Ltd is Sri Lanka’s first privately owned fabric intensive free trade zone. It is the leader in industrial multi facility connectivity empowering the apparel and fabric manufacturing industry, the best supply chain solution in sustainable industrial eco system. This company provides different types of shared services to other apparel companies as well inside the park and we can categorize these shared services according to five types such as power, water, biological chemical effluent treatment, accommodation and supply chain. This factory was operated earlier by Kaloon Lanka (Pvt) Ltd which was a Korean based company. However in 2006 XYZ (Pvt) Ltd acquired this premises and continue the operations under a 99 years lease agreement with the Board of Investment (BOI). Once they acquired the company, there were different types of assets which were recognized in their new SOFP. These assets are related to the non-current assets, capital working progress and current assets. However if a company does have any intention to sell an asset a set of criteria should be fulfilled according to SLFRS 5-Assets held for sale [Paragraph 2] standard, there after we have to classify that asset as Assets held for sale.