- June 25, 2021 at 12:36 pm #626286joynowMember
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Hi,Sir past year Sep 2018
Q: Discontinued operations
The directors of Moyes wish advice as to whether the disposal of Barham should be treated as a discontinued operationand separately disclosed within the consolidated statement of profit or loss. There are several other subsidiaries which all produce similar products to Barham and operate in a similar geographical area. Additionally, Moyes holds a 52% equity interest in Watson. Watson has previously issued share options to other entities which are exercisable in theyear ending 30 September 20X9. It is highly likely that these options would be exercised which would reduce Moyes’interest to 35%. The directors of Moyes require advice as to whether this loss of control would require Watson to beclassified as held for sale and reclassified as discontinued.
Answer: Both entities would be components of the Moyes group since their operations and cash flows are clearly distinguishable for reporting purposes. Barham has been sold during the year but there appears to be other subsidiaries which operate in similar geographical regions and produce similar products. Little guidance is given as to what would constitute a separate major line of business or geographical area of operations. The definition is subjective and the directors should consider factors such asmateriality and relevance before determining whether Barham should be presented as discontinued or not.
My question is does Barham considered to be discontinued operation as it had been disposed?June 26, 2021 at 4:29 pm #626395Stephen WidbergKeymaster
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Discontinued = discontinued or sold DURING THE YEAR or held for sale at the balance sheet date.
(Revise those flashcards!!)
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