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Good day Sir
I would like to enquire on the current issues of IFRS 5:
I am however not understanding when they say ” the definition of discontinued operations have come under scrutiny particularly wrt to concept of separate line of business or geographical location”. It further states that this can be interpreted differently depending on how the entity determines its operating segment.
Why is there scrutiny with regards to this aspect I am failing to articulate it properly or understand this aspect .
It also goes on to say that there are different practices with regards how transactions between discontinued and continued operations are treated;
i. Some entities eliminate the transactions in full without any adjustments,
ii. while others eliminate with adjustments to reflect how transactions between continuing or discontinued operations will be reflected in continuing operations going forward.
iii.Some entities do not eliminate such transactions.
(Will I be safe to say IFRS 5’s issue is also that it does not reflect or clearly outline the impact of transactions between continuing and discontinuing operations)Many thanks,
Kind regards
CorberttHi,
I’m not too sure where you’ve got all of this detail from with regards to IFRS 5 and current issues.
The first point is essentially saying that the definition in IFRS8 is different to what is interpreted in IFRS5. IFRS5 may state it is a separate line of business but if it isn’t a segment in IFRS8 then the users of the accounts wouldn’t have had any previous disclosure of the performance of what is now being disclosed.
You’re then correct with regards to what you say in your other points, in that there isn’t sufficient detail within the current standard about how to do the split between continuing and discontinued operations. It tells us what to disclose but doesn’t tell us how to do so.
Thanks
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