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profit from discontinued ops

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › profit from discontinued ops

  • This topic has 3 replies, 2 voices, and was last updated 7 years ago by MikeLittle.
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  • October 29, 2015 at 2:16 pm #279531
    mansoor
    Member
    • Topics: 424
    • Replies: 542
    • ☆☆☆☆

    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
    Keymaster
    • Topics: 26
    • Replies: 22698
    • ☆☆☆☆☆

    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
    Member
    • Topics: 424
    • Replies: 542
    • ☆☆☆☆

    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
    Keymaster
    • Topics: 26
    • Replies: 22698
    • ☆☆☆☆☆

    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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