Dear sir,
If we sale the shares of a subsidiary (for example we were holding 70% of shares of a Subsidiary and we sold 40% of the shares such that it became Associate), do we need to make discontinued operation disclosures. Is it linked to discontinued operations in any way?
Thanks,
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Discontinued operation and sale of shares of Subsidiary
7y ago#1Did you mean to post this to SBR forum?
Actually I was reading about changes in ownership of Subsidiary in group audit area and I stuck with this question in my mind that is there any relation between sale of shares of Subsidiary and Discontinued Operation disclosure? Help me please to clarify as the Subsidiary may be a major business segment.
7y ago#3In answer to this Q to IASB " Is classification as a discontinued operation relevant when the entity plans to retain significant influence over its former subsidiary after the sale?"
IFRIC's response was "a disposal group classified as held for sale will also be a discontinued operation if the criteria of paragraph 32 of IFRS 5 are met".
Para 32 states:
"A discontinued operation is a component of an entity that either has been disposed of, or is classified as held for sale, and
(a) represents a separate major line of business or geographical area of operations,
(b) is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations or
(c) is a subsidiary acquired exclusively with a view to resale."
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