Accounting Theory Group Research Project
IFRS 5
IFRS 5 is about non-current assets held for sale and discontinued operations, which state that the aims of disclosed discontinued operations and non-current asset disposal is to helped group of users of the financial statement to assess the financial effects. The definition of discontinued operation in IFRS may differ from other accounting standard, IFRS has defined discontinued operation is an asset or component of a company that either has been disposed or is regarded as held-for-sale, and also have any of the following conditions:
1) It represents a separate key business or an operation area
2) It is part of a single coordinated plan to dispose of a separate key business area of operations
3) Acquired a subsidiary that with purpose for resale
The entity should disclose discontinued operations in both income statement, balance sheet and cash flow statement, and look at the three special points in the following:
First, the entity should disclose a single amount in the income statement including the sum of the profit or loss after tax of the discontinued operation and recognized the gain or loss after tax by using the measurement of fair value less cost to sell or on the disposal of the assets.
Second, the entity should analysis of the single amount in the income statement or in the notes which had indicated above, this analysis consist of revenue, expenses, profit or loss before tax and related income taxes expenses, the sum of the gain or loss after tax by using the measurement of fair value less cost to sell or on the disposal of the assets and must be reported the amount for prior periods of the balance sheet date.
Third, the net cash flows attributable to operating, investing and financing activities from discontinued operations, it can be disclosed either in the notes or in the cash flow statement, and it is also must be disclosed the amount for prior periods.
Here is an example of the accounting treatment of the discontinued operations:
If there
IFRS 5 is about non-current assets held for sale and discontinued operations, which state that the aims of disclosed discontinued operations and non-current asset disposal is to helped group of users of the financial statement to assess the financial effects. The definition of discontinued operation in IFRS may differ from other accounting standard, IFRS has defined discontinued operation is an asset or component of a company that either has been disposed or is regarded as held-for-sale, and also have any of the following conditions:
1) It represents a separate key business or an operation area
2) It is part of a single coordinated plan to dispose of a separate key business area of operations
3) Acquired a subsidiary that with purpose for resale
The entity should disclose discontinued operations in both income statement, balance sheet and cash flow statement, and look at the three special points in the following:
First, the entity should disclose a single amount in the income statement including the sum of the profit or loss after tax of the discontinued operation and recognized the gain or loss after tax by using the measurement of fair value less cost to sell or on the disposal of the assets.
Second, the entity should analysis of the single amount in the income statement or in the notes which had indicated above, this analysis consist of revenue, expenses, profit or loss before tax and related income taxes expenses, the sum of the gain or loss after tax by using the measurement of fair value less cost to sell or on the disposal of the assets and must be reported the amount for prior periods of the balance sheet date.
Third, the net cash flows attributable to operating, investing and financing activities from discontinued operations, it can be disclosed either in the notes or in the cash flow statement, and it is also must be disclosed the amount for prior periods.
Here is an example of the accounting treatment of the discontinued operations:
If there