Discontinued operations - audit of accounting estimates, Auditing

Discontinued Operations - Audit of Accounting Estimates

A discontinued operation is a component of an entity that either has been disposed of or is held for sale. So it might be a subsidiary or a main line of business or geographical area. Then it will have been a cash-generating unit or collection of cash-generating units as described in IAS 36 Impairment of Assets.

Disclosures of discontinued operations involved as:

  1. Analysis of the post-tax loss or profit in revenue, pre-tax profit or loss, expenses and the related income tax expense;
  2. The loss and gain recognised on measurement to fair value less costs to sell or on disposal, and the concerned income tax expense;
  3. Net cash flows attributable to operating, financing and investing activities;
  4. Assets held for sale individually from all other assets; and
  5. Liabilities of a disposal collection held for sale individually from all other liabilities.

As regards measurement and recognition, IFRS 5 does not establish any individual principles, however relies upon those of IAS 36 Impairment of Assets and IAS 37 Provisions, contingent Liabilities and Contingent Assets, and also on IAS 19 Employees Benefits and IAS 16 Property, Equipment and Plant.

IAS 37 explains whenever a provision should be well known on discontinuance. Especially, a restructuring provision should merely involve the direct expenditure arising from the restructuring that are both;

(i) Necessarily entailed through the restructuring, and

(ii) Not associated along with the ongoing activities of the enterprise

It may be essential, on a discontinuance, to apply the provisions of IAS 36 in knowing impairment losses.

Posted Date: 1/28/2013 1:32:35 AM | Location : United States







Related Discussions:- Discontinued operations - audit of accounting estimates, Assignment Help, Ask Question on Discontinued operations - audit of accounting estimates, Get Answer, Expert's Help, Discontinued operations - audit of accounting estimates Discussions

Write discussion on Discontinued operations - audit of accounting estimates
Your posts are moderated
Related Questions
Write a paper (may be real or fictional) involving Accounting and business moral dilemmas. The paper should be 13 pages (double spaced) in accordance with APA guidelines. more des

The following situations involve a possible violation of the MIA ByLaws (on professional ethics, conduct and practice). For each situation, (1) decide whether or not the Code has b

With reference to the case study business, plan an audit. You should make specific reference in your plan to: Scope of the audit Materiality Risk factors including fra

Taxation - Audit Process Companies suffer corporation tax. The Companies Act use that corporation tax payable on the profits of any specific year should be matched against tho

Issues for Finance Leases For the leases such have been categorize as finance leases, a model uses to be checked for the following issues: (i) Check technique used to split

ILLEGAL ACTS Auditors may uncover criminal offences committed by a client or an employee of the client. This puts them in a difficult place, though the auditor must act careful

Managements interest in the accounting system Management needs complete and accurate books of accounts because: There is no other way the business can be controlled; Rec

Q. Explain the Single Audit Act? Single Audit Act - Single Audit Act of 1984 and Single Audit Act Amendments of 1996 establish requirements for audits of states, non-profit org

Skills and Objectivity of Expert The skills and competence of the expe rt Whether planning to require the work of an expert, so the auditor should assess the professiona

Assets held for Sale - Audit Process A non-current asset or disposal collection is classified as held for sale whether its carrying amount will be recovered principally via a