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if a subsidiary is acquired a s a discontinued operation..then the profit on disposal …should it be added to profit of discontinued operation…or part of profit from continued operation ?//pls help ….thank youi
Densdumbo – please do not keep pleading in your posts! There is no need to keep saying “Please help”. If you post your question on this “Ask the tutor” page, I WILL help.
Your question confuses me! You start by asking about a subsidiary ACQUIRED as a discontinued operation and then immediately switch to a subsidiary DISPOSED OF as a discontinued operation!
I assume that we are disposing of a discontinued operation. And profit or loss will not go through Profit or Loss account – it’s an “Other Comprehensive Income” matter
yup i actually meant that a subsidiary is acquired as a discontinued operation and it has been diposed off within 6months…so whatever pre disposal results of that subsidiary should be recognised as profit from discontinued operation …and the pprofit on disposal of that subsidiary should be added to it ….but in the kaplan text ..there is a sum where they have taken the profit on disposal as a part of profit and loss …
thank you
From the limited information you have given me I suggest that, on acquisition, it should have been classified as an asset held for sale.
Then, upon disposal, I would have thought that the results and profit on disposal of the newly-discontinued operation should be shown as part of other comprehensive income. Certainly, they should be shown separately from the detail of the continuing operations but I’m not sure that they should be within profit or loss
Sorry not to be more definitive 🙁
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