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Discontinuing Operation
For Example: XY Ltd. has three major lines of business steel, tea and
electrical appliances; it has decided to sell the steel division during the
financial year 2002-2003. A sale agreement has been entered into on 30-
11-2002 with Z Ltd. Under which steel division shall be transferred to Z
Ltd. on 30-03-2003. This is a case of disposing of substantially in its
entirety. However, if resolution is passed for sale of various asset and to
repay the various liabilities individually of steel division, accordingly the
assets like land and building, plant and machinery are sold separately and
various liabilities like those of creditors are paid individually, it is a case of
“disposing by piecemeal”.
• Net selling prices from the sale of those net assets for which
the enterprise has entered into binding sale agreements and
the expected timing thereof and carrying amount of those
assets.
Manner of disclosure
The disclosure of amount pre-tax profit or less and tax expense and
amount of gain or losses recognised on disposal of assets and settlement
of liabilities should be disclosed on the face of statement of profit/loss
accounts, other information should be disclosed in the notes to accounts.
Title
Calculation
As per AS-24 these As per IFRS-5 after the As per US GAAP after
assets are to be carried non-current assets are the non-current assets
at cost less classified as ‘held for are classified as ‘held
depreciation less sale’ these will be for sale’ these will be
impairment loss. carried at lower of carried at lower of
carrying amount and carrying amount and
fair value. fair value.
Presentation
Accounting Standard - 24
(Discontinuing Operation)
Submitted By :
Roll No. Name
07 Sarvesh Chavan
40 Umesh Parulekar
Submitted To :
Prof. Sadhana Ogale
DEPARTMENT OF
MASTER OF MANAGEMENT STUDIES