Rural co has 2 lines of business that have been disposed of in the year
Sector x operated in country A. Rural has no other operations in country A and sector x produced 0.5% of total revenue of rural
Sector Y operated in same country as rural head office. It sold a different product from other components of rural and contributed 10% of total revenue of Rural co
Which of the sectors should be disclosed as a discontinued operation in current year
Sir correct ans is that sector Y but can you please explain me that why sector y is correct ans and why sector x is not correct ans?
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Discontinued operation mcq
6y ago#1Hi,
One of the criteria within IFRS 5 is that it needs to be a separate major line of business or geographical location. Given X has only 0.5%of total revenue, it is not a major location. Given Y has 10% of total revenue, this is considered a major location and is discontinued.
Thanks
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