Presentation Flashcards
How does a local authority SFP look?
Capital contributed by the government £x
Reserves £x
Accumulated deficit (£x)
what is a discontinued operation?
a component of an entity either held for sale or which has been disposed of
- it represents a major line of business or geographical area of operations OR
- it is part of a single coordinated plan to dispose of a separate major line of business or geographical area of ops
- is a subsidiary acquired exclusively with a view to resale
it needs to be clearly distinguishable from the rest of the operation of the business operationally and for financial reporting
it must either have been disposed of or a decision to dispose of it has been made highly probably in the next 12m
if pets at home had a spooky factory they were going to shut down in 9 months time, would this be a discontinued operation or not?
no as it is not either disposed of or held for sale. it would need to be continuing ops
how do you present a discontinued operation in the SPL?
YOU STRIP OUT ALL of the P&L amounts for the discontinued operation and just leave the continuining ops figures in the normal SPL. then you distill all the discontinued operations profit/loss into one figure for the main SPL, add it beneath the p/l for conitnuing operations to make the TOTAL profit/loss for the year.
you also need to do a note for the discontinued operation which has its:
revenue expenses (all in one) pretax p/l tax expense p/l recognised on re-measurement of nca income tax adjustment on that total
how do you present cash flows for someone with discontinued operations?
just do it all together as normal
how do you do SOfP for a discontinued operation business?
you separate out only the NCA that haven’t yet been disposed of and put a line called ‘NCA held for sale’ in.
how is UK GAAP (FRS102) different to IFRS (5) for discontinued operations?
1) all lines are done for a discontinued operation and so it has its own column next to continuing ops, for the P&L
2) there is not a ‘held for sale’ category, assets of a discontinued operation are depreciated until up until the date of disposal.
