Topic list Syllabus reference

Key terms
Presenting discontinued operations

Discontinued operation. A component of an entity that has either been disposed of, or is classified as held for sale, and:

1. 
   Represents a separate major line of business or geographical area of operations
   
2. 
   Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations, or
   
3. 
   Is a subsidiary acquired exclusively with a view to resale.
   

Component of an entity. Operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. (IFRS 5: App A)
An entity should present and disclose information that enables users of the financial statements to evaluate the financial effects of discontinued operations and disposals of non-current assets or disposal groups. (IFRS 5: para. 30)

This allows users to distinguish between operations which will continue in the future and those which will not, and makes it more possible to predict future results.
An entity should disclose the net cash flows attributable to the operating, investing and financing activities of discontinued operations. These disclosures may be presented either on the face of the statement of cash flows or in the notes. (IFRS 5: para. 33)

7. 
   Illustration
   

The following illustration is taken from the implementation guidance to IFRS 5. Profit for the period from

discontinued operations would be analysed in the notes.		(IFRS 5: IG)
LARGE GROUP STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DECEMBER 20X2	20X2	20X1