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The P group of companies has a financial year end 30 june 2004 The financial statements were authorised three months later.The group is disposing of many subsidiary each of which is separate major line of a business or geographical area.
on 10th july 2004 an announcement was made that subsidiary C was for sale it was sold on 10 september 2004
explain whether subsidiary C meets the definition of discontinued operation per ifrs 5.
according to kaplan C is not discontinued operation. the conditions for classificationas held for sale were not met until after year end
but i think the the C meets criteria per ifrs 5 and is discontinued operation but it is disposed of in next year so for this it is not discontinued operation for next year it is discontinued operation because in this year it is non adjusting event . is i am correct sir please help me i will be thankfullIt’s not discontinued as at the June 2004 year end because it was still continuing. It may have been described as an asset held for sale if it had satisfied all those IFRS 5 criteria, but it’s not discontinued.
I am in total agreement with Kaplan on this.
Yes, it’s a non-adjusting event for year June 2004 and it will be a discontinued operation in June 2005
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