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    Advance Accounts Ca Inter by Raj K Agarwal

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    AS 24 establishes principles for reporting discontinuing operations to enhance the ability to project an enterprise's cash flows, earnings, and financial position. A discontinuing operation is a component disposed of substantially or piecemeal, representing a major business line or geographical area. The initial disclosure event is entering a binding sale agreement or board approval and announcement of a detailed discontinuance plan identifying major assets, disposal method, completion period, affected locations, and employee impacts. An enterprise must disclose descriptions, segments, initial event details, expected completion dates, asset/liability carrying amounts, revenues/expenses, pre-tax profits/losses, and cash flows of discontinuing operations.

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    Advance Accounts Ca Inter by Raj K Agarwal

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    ashish.jhaa756
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    AS 24 establishes principles for reporting discontinuing operations to enhance the ability to project an enterprise's cash flows, earnings, and financial position. A discontinuing operation is a component disposed of substantially or piecemeal, representing a major business line or geographical area. The initial disclosure event is entering a binding sale agreement or board approval and announcement of a detailed discontinuance plan identifying major assets, disposal method, completion period, affected locations, and employee impacts. An enterprise must disclose descriptions, segments, initial event details, expected completion dates, asset/liability carrying amounts, revenues/expenses, pre-tax profits/losses, and cash flows of discontinuing operations.

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    Advance accounts ca inter by Raj k Agarwal

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    AS 24 establishes principles for reporting discontinuing operations to enhance the ability to project an enterprise's cash flows, earnings, and financial position. A discontinuing operation is a component disposed of substantially or piecemeal, representing a major business line or geographical area. The initial disclosure event is entering a binding sale agreement or board approval and announcement of a detailed discontinuance plan identifying major assets, disposal method, completion period, affected locations, and employee impacts. An enterprise must disclose descriptions, segments, initial event details, expected completion dates, asset/liability carrying amounts, revenues/expenses, pre-tax profits/losses, and cash flows of discontinuing operations.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    27 views2 pages

    Advance Accounts Ca Inter by Raj K Agarwal

    Uploaded by

    ashish.jhaa756
    AS 24 establishes principles for reporting discontinuing operations to enhance the ability to project an enterprise's cash flows, earnings, and financial position. A discontinuing operation is a component disposed of substantially or piecemeal, representing a major business line or geographical area. The initial disclosure event is entering a binding sale agreement or board approval and announcement of a detailed discontinuance plan identifying major assets, disposal method, completion period, affected locations, and employee impacts. An enterprise must disclose descriptions, segments, initial event details, expected completion dates, asset/liability carrying amounts, revenues/expenses, pre-tax profits/losses, and cash flows of discontinuing operations.

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    DISCONTINUING OPERATIONS 10

    (AS-24)
    AS 24 is applicable to all discontinuing operations.

    The objective of AS 24 is to establish principles for reporting information about discontinuing


    operations, thereby enhancing the ability of users of financial statements to make projections of an
    enterprise’s cash flows, earnings-generating capacity, and financial position by segregating
    information about discontinuing operations from information about continuing operations.

    Discontinuing Operation
    A discontinuing operation is a component of an enterprise:
    a. That the enterprise, pursuant to a single plan, is:
    (i) Disposing of substantially in its entirety, such as by selling the component in a single
    transaction or by demerger or spin-off of ownership of the component to the
    enterprise’s shareholders or
    (ii) Disposing of piecemeal, such as by selling off the component’s assets and settling its
    liabilities individually or
    (iii) Terminating through abandonment and
    b. That represents a separate major line of business or geographical area of operations.
    c. That can be distinguished operationally and for financial reporting purposes.

    Initial Disclosure event


    With respect to a discontinuing operation, the initial disclosure event is the occurrence of one of the
    following, whichever occurs earlier:
    a. The enterprise has entered into a binding sale agreement for substantially all of the assets
    attributable to the discontinuing operation or
    b. The enterprise’s board of directors or similar governing body has both
    (i) Approved a detailed, formal plan for the discontinuance and
    (ii) Made an announcement of the plan.

    A detailed, formal plan for the discontinuance normally includes:


    • Identification of the major assets to be disposed of;
    • The expected method of disposal;
    • The period expected to be required for completion of the disposal;
    • The principal locations affected;
    • The location, function, and approximate number or employees who will be compensated for
    terminating their services; and
    WWW.STUDYATHOME.ORG CA. RAJ K AGRAWAL
    DISCONTINUING OPERATIONS (AS-24) 10.2
    • The estimated proceeds or salvage to be realized by disposal.

    An enterprise’s board of directors or similar governing body is considered to have made the
    announcement of a detailed, formal plan for discontinuance, if it has announced the main features
    of the plan to those affected by it, such as, lenders, stock exchanges, trade payables, trade unions,
    etc. in a sufficiently specific manner so as to make the enterprise demonstrably committed to the
    discontinuance.

    Presentation and Disclosure


    An enterprise should include the following information relating to a discontinuing operation in its
    financial statements beginning with the financial statements for the period in which the initial
    disclosure event occurs:
    a. A description of the discontinuing operation(s)
    b. The business or geographical segment(s) in which it is reported as per AS-17
    c. The date and nature of the initial disclosure event.
    d. The date or period in which the discontinuance is expected to be completed if known or
    determinable
    e. The carrying amounts, as of the balance sheet date, of the total assets to be disposed of and
    the total liabilities to be settled
    f. The amounts of revenue and expenses in respect of the ordinary activities attributable to
    the discontinuing operation during the current financial reporting period
    g. The amount of pre-tax profit or loss from ordinary activities attributable to the discontinuing
    operation during the current financial reporting period, and the income tax expense related
    thereto
    h. The amounts of net cash flows attributable to the operating, investing, and financing
    activities of the discontinuing operation during the current financial reporting period

    WWW.STUDYATHOME.ORG CA. RAJ K AGRAWAL

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