FAQ 6.9: What accounting should a transferor apply in a transfer of functions between entities not under common control?

What accounting should a transferor apply in a transfer of functions between entities not under common control?

GRAP 106 on Transfer of Functions Between Entities Not Under Common Control does not prescribe the accounting treatment for the transferor in the arrangement. In formulating an accounting policy, the transferor should consider the requirements in existing Standards of GRAP. Where the transferor disposes of assets, or groups of assets and liabilities, it assesses whether the disposal meets the requirements of a discontinued operation in GRAP 100 on Discontinued Operations.

(a) The disposal meets the requirements of a discontinued operation: The transferor applies GRAP 100 and provides the disclosures required by GRAP 1 on Presentation of Financial Statements paragraph .91.

(b) The disposal does not meet the requirements of a discontinued operation: The transferor formulates an accounting policy and disclosures using existing Standards of GRAP. For example, the requirements of GRAP 17 on Property, Plant and Equipment and the impairment Standards may be appropriate in accounting for the assets until they are transferred. The disclosure required by GRAP 1.91 may be appropriate if a disposal does not meet the requirements of a discontinued operation because it has not yet occurred.

Refer to FAQ 6.9 on what accounting a transferor should apply in a transfer of functions between entities not under common control (https://buff.ly/2XcjwyB).