Functional and presentation currency 16 4. When such a strategic shift occurs, a company must present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability sections of the balance sheet. Disposal of Non-Current Assets and Presentation of Discontinued Operations. Use of judgements and estimates 16 Performance for the year 18 5. The objective of FRS 5, Non-current Assets Held for Sale and Discontinued Operations, is to specify the accounting for assets (and disposal groups) held for sale and the presentation and disclosure of discontinued operations. Operating segments 18 6. In April 2014, FASB issued Accounting Standards Update (ASU) 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which is effective for fiscal years beginning after December 15, 2014.Its primary effect is to tighten the requirements for treating the disposal of a component of a business as a discontinued operation. In addition, the IASB has issued several other amendments to its standards during the past year. Other stakeholders noted that some of the guidance on assets that are recurring in nature qualify for discontinued operations presentation under Subtopic 205-20, Presentation of Financial Statements— Discontinued Operations. Income and expenses 27 9. Our white paper, Discontinued operations: Identification, presentation and disclosure, provides detailed discussion and examples related to application of the discontinued operations guidance in Subtopic 205-20, Presentation of Financial Statements – Discontinued Operations, of the FASB’s Accounting Standards Codification. That results in financial statements that are less decision useful for users. Below is an example of a single-step income statement containing discontinued operations. Earnings per share 30 Employee benefits 32 11. There are a few minor add-ons and omissions, and alterations from international accounting criterions, To include disposal of non-current assets. The presentation includes the balance sheet ( which is non included in FRS 3 ) . Discontinued operations are operations a company no longer requires, and that have been shut down. If you have a profit from discontinued operations, your taxes payable will increase; if you show a loss, your total taxes payable will decrease. 3. To learn more about the required presentation of information to be disclosed see an intermediate accounting textbook. Discontinued operation 25 7. associated with discontinued operations on the balance sheet. Our focus here is to show where the results of discontinued operations will appear in the company's income statement. An appendix illustrating example disclosures for the early adoption of IFRS 9 Financial Instruments, taking into account the amendments arising from IFRS 9 Financial Instruments (2010) and Mandatory Effective Date and Transition Disclosures (Amendments to IFRS 9 and IFRS 7) (2011). FRS 5 will replace FRS 135 2004, Discontinuing Operations, when it … Revenue 26 8. Chapter 7 — Presentation and Disclosure Requirements for Disposals That Are Reported as Discontinued Operations 7.2 Balance Sheet Presentation of Discontinued Operations Previous Section Next Section For example, certain entities reclassify these assets and liabilities on the prior-year balance sheet to conform prior-year balance sheet presentation to the presentation required on the current-year balance sheet. Net finance costs 29 10. the net cash flows attributable to the operating, investing and financing activities of discontinued operations. The detailed disclosures noted above must cover both the current and all prior periods presented in the financial statements for all operations that have been discontinued by the balance sheet date for the latest period presented. For example, if the loss from discontinued operations is $100,000 and your tax rate is 30 percent, the applicable tax benefit is $30,000 ($100,000 x 0.30). 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