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1. ma’am in this question why is scientific publication division categorised as discontinued operation? I understand how it is a disposal group held for sale, but then the second criteria(separate line of business or geographical area of operation) for classification as discontinued operation doesn’t seem to be met.
So then why a discontinued operation classification is needed as per examiner’s answer?
2. maam in part a) since there were no separate mark allocations for “(i)” and “(ii)” can we combine the requirements ( “(i)” and “(ii)” ) under the umbrella sub part (a)?
The Q tells you that it is a CGU which be definition is an identifiable group of assets that generates cash inflows that are largely INDEPENDENT of the cash inflows – i.e. separate.
A disposal group invariably goes hand-in-hand with a discontinued operation – which is why IFRS 5 deals with the accounting for both SoFP aspect (“held for sale”) and SoPL aspect (“discontinuing operation”).
Oh so disposal of all subsidiaries, CGUs and operating segments are likely to be discontinued operations?
also maam I have another doubt pertaining to Myron question,
the reason why examiner’s answer does not include any mention of “non-adjusting event” is because the question only indicates high probability and finalisation stage of disposal but not the fact that it is disposed after year end, the latter would have led to material non adjusting event disclosure, right? Like what happens in Ryder co S/D19 question? primal is “disposed” post year end hence disclosure of non adj event necessary?
Classification as held-for-sale is recognised at the reporting date because the criteria are met.
The sale next year is recognised next year. The “fruition” of the transaction is due to be finalised on 1 Aug 20X5, this is AFTER the financial statements will be issued (‘in the next few weeks’ and today’s date is 1 July 20X5.The “fruition” of the transaction is due to be finalised on 1 Aug 20X5, this is AFTER the financial statements will be issued (‘in the next few weeks’ and today’s date is 1 July 20X5.)
Wait ma’am!!! isn’t this a judgment call! Few weeks according to me was that transaction comes to fruition before auditor’s report and finical statements are issued-hence my concern for Non-Adjusting event, but according to you transaction will happen afterwards…
so then what’s the best thing to do?
In context, “the next few weeks” could be next week or the week after or maybe the week after that. But if the examiner wanted you to think that it would be signed next month – it would say next month.
Look at this another way – if an asset/disposal group is classified as held for sale, the notes must disclose “information that enables users of the financial statement to evaluate the financial effects ….” – there can be no need to disclose it yet again.
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