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Group Disposal and discontinued operation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Group Disposal and discontinued operation

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by Stephen Widberg.
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  • August 23, 2021 at 3:26 pm #632631
    msuvarna
    Member
    • Topics: 9
    • Replies: 3
    • ☆

    Hello Sir

    I came across a question in the SBR Kaplan Book where an entity disposes a subsidiary and then states it as a discontinued operation. The question asks us to prepare a consolidated profit or loss statement.

    The disposal happened in the mid-year. However, all the items in the statement weren’t time apportioned and the discontinued operation was calculated as the profit for the period time apportioned added with the group profit on disposal shown under the operating profit

    Can you clarify this

    August 24, 2021 at 3:28 pm #632767
    Stephen Widberg
    Keymaster
    • Topics: 11
    • Replies: 2837
    • ☆☆☆☆☆

    With a discontinuance you show the results separately at the bottom of the P&L (as you know).

    If the sub was sold mid-year you would only show 6 months of profit. You definitely can’t show profits after you have actually sold it………….that would be stealing!

    If the sub is held for sale at the year end you would show 12 months of profit.

    Does that solve it?

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