PPT: Accounting Standards (24) | Advanced Accounting for CA Intermediate PDF Download

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Accounting Standard 24
Discontinuing Operations
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Accounting Standard 24
Discontinuing Operations
Objective
• The objective of this Standard 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.
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Accounting Standard 24
Discontinuing Operations
Objective
• The objective of this Standard 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.
Scope
1. This Standard applies to all discontinuing 
operations of an enterprise.
1. The requirements related to cash flow 
statement contained in this Standard are 
applicable where an enterprise prepares and 
presents a cash flow statement.
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Accounting Standard 24
Discontinuing Operations
Objective
• The objective of this Standard 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.
Scope
1. This Standard applies to all discontinuing 
operations of an enterprise.
1. The requirements related to cash flow 
statement contained in this Standard are 
applicable where an enterprise prepares and 
presents a cash flow statement.
Meaning
• A Discontinuing operation is a part of an 
enterprise –
– (a) which is being disposed of or abandoned 
pursuant to a single co-ordinated plan
– (b) it represents separate line of business or 
geographical area of operations; and
– (c) can be distinguished operationally and for 
financial reporting. 
All these three conditions need to be satisfied 
simultaneously.
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Accounting Standard 24
Discontinuing Operations
Objective
• The objective of this Standard 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.
Scope
1. This Standard applies to all discontinuing 
operations of an enterprise.
1. The requirements related to cash flow 
statement contained in this Standard are 
applicable where an enterprise prepares and 
presents a cash flow statement.
Meaning
• A Discontinuing operation is a part of an 
enterprise –
– (a) which is being disposed of or abandoned 
pursuant to a single co-ordinated plan
– (b) it represents separate line of business or 
geographical area of operations; and
– (c) can be distinguished operationally and for 
financial reporting. 
All these three conditions need to be satisfied 
simultaneously.
Initial Disclosure Event
• Statement showing all the assets or liabilities 
discounted. 
• It should contain the following
– (a) a description of the discontinuing operation(s);
– (b) the business or geographical segment(s) in which it 
is reported as per AS 17, Segment Reporting;
– (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;