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Q. On 1 July 2000 its decided to close p area of operations , a press release is issued and employees are notified ,
Losses from 1st July 2000 till September 2000( year end) are 600,000 and from September 2000 till 1st January the closure date they are 1 million.
My question is that shouldn’t the losses of 600,000 be treated as profit and loss from discontinued operations (single figure) in September 2000 accounts rather than September 2001 which was the solution in Answers
The first point is, of course, that it cannot be dealt with in the 2000 financial statements as a discontinued operation because ….. it isn’t discontinued
Now, are you really sure that they haven’t been expensed in year to September 2000? where have you found the question? I’d like to look at it (and the solution) for myself
No they have been expensed out in 2000 at 600,000 but not desperately as discontinued operation , I’m saying that discontinued operations figure should be given when the meeting and notification is done or when its finalized and actually closed down?
The expression is “discontinued” not “discontinuing” – it’s a question of which participle is used. To be fair, before the revision to IFRS 5 the expression was “discontinuing” but that changed. If you think about it, all businesses – in fact, all forms of life and maybe even the planet itself – are discontinuing. It’s just a matter of time-frame.
It was Einstein who famously said “There are only two things that are infinite – the Universe and man’s stupidity. And I’m not sure about the Universe.”
In order to be treated as a discontinued operation under IFRS 5, the operation must actually be discontinued
OK?
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