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Just a quick question,
In the specimen exam, Q24, why is the profit arising from the sale of the factory itself not factored into the profit/loss on discontinued operations relating to property/plant & equipment? Im assuming the cost associated with the renaged lease (850,000) is non applicaable as it is due after year end??
Thanking you
I imagine that it’s because the question specifically asks for the “profit or loss on discontinued operations relating to property, plant and equipment” and factory premises are not part of IAS 16 Property, Plant and Equipment
I’ve just had another look at the IASPLUS summary of IAS 16 and it seems to me that the word “property” is always taken as an integral part of the expression “property, plant and equipment”
It doesn’t appear to my naive mind that physical structures like buildings and even the land upon which the buildings stand are included within the general expression “property, plant and equipment”
So the answer is restricted to the plant that will be sold for a net figure of $450,000 representing a loss on sale of $1,750,000
Hope that helps
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