profit from discontinued ops

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October 29, 2015 at 2:16 pm #279531
mansoor
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part of the question is

2011
profit after tax: 2000 – continuing ops
profit after tax: (750) – discontinued ops

2010
profit after tax: 1750 – continuing ops
profit after tax: 600 – discontinued ops

Analysts expect profits to increase by 6% from existing ops for year 2012

what is the profit if analysts are correct?

in the answer, 2000 is taken and the loss of 750 is ignored, ie profit = 2000×1.06=2120

is this because the discontinued ops have to be disposed off within 12 months and that these ops are not expected to exist in 2012?

thanks
October 29, 2015 at 5:30 pm #279567
MikeLittle
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The expression is “discontinued operations” not “discontinuing”

They’ve stopped, there’s no more coming from that source.

So they have no affect going forward
October 29, 2015 at 5:43 pm #279571
mansoor
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given the same data, what if analysts made prediction in 2010 about 2011.

would the discontinued amount be ignored?
October 29, 2015 at 5:53 pm #279576
MikeLittle
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No, because it wasn’t discontinued in 2010, it was still in operation. It was only discontinued in 2011 so that’s when it will be treated in accordance with IFRS 5
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