Preview

Accounting Theory Group Research Project

Good Essays
Open Document
Open Document
1630 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Accounting Theory Group Research Project
IFRS 5
IFRS 5 is about non-current assets held for sale and discontinued operations, which state that the aims of disclosed discontinued operations and non-current asset disposal is to helped group of users of the financial statement to assess the financial effects. The definition of discontinued operation in IFRS may differ from other accounting standard, IFRS has defined discontinued operation is an asset or component of a company that either has been disposed or is regarded as held-for-sale, and also have any of the following conditions:
1) It represents a separate key business or an operation area
2) It is part of a single coordinated plan to dispose of a separate key business area of operations
3) Acquired a subsidiary that with purpose for resale
The entity should disclose discontinued operations in both income statement, balance sheet and cash flow statement, and look at the three special points in the following:
First, the entity should disclose a single amount in the income statement including the sum of the profit or loss after tax of the discontinued operation and recognized the gain or loss after tax by using the measurement of fair value less cost to sell or on the disposal of the assets.
Second, the entity should analysis of the single amount in the income statement or in the notes which had indicated above, this analysis consist of revenue, expenses, profit or loss before tax and related income taxes expenses, the sum of the gain or loss after tax by using the measurement of fair value less cost to sell or on the disposal of the assets and must be reported the amount for prior periods of the balance sheet date.
Third, the net cash flows attributable to operating, investing and financing activities from discontinued operations, it can be disclosed either in the notes or in the cash flow statement, and it is also must be disclosed the amount for prior periods.
Here is an example of the accounting treatment of the discontinued operations:
If there

You May Also Find These Documents Helpful

  • Powerful Essays

    memo

    • 973 Words
    • 4 Pages

    FASB Accounting Standards Codification (ASC) Subtopic 420-10 Exit or Disposal Cost Obligations presents the relevant guidance on cost obligations. Per ASC…

    • 973 Words
    • 4 Pages
    Powerful Essays
  • Good Essays

    1. The operations and cash flows of the cruise ship have been (or will be) eliminated from the ongoing operations of the entity following the disposal…

    • 640 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Items included in net income are displayed in various classifications. Those classifications can include income from continuing operations, discontinued operations, extraordinary items, and cumulative effects of changes in accounting principle. This Statement does not change those classifications or other requirements for reporting results of operations.…

    • 296 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Nt1310 Unit 10

    • 4489 Words
    • 18 Pages

    23. This approach is not correct since at the very minimum the investor should be aware that certain assets are used in the business which are not reflected in the main body of the financial statements. Either the company should keep these assets on the balance sheet or they should be recorded at salvage value and the resulting gain recognized. In either case, there should be a clear indication that these assets are fully depreciated, but are still being used in the business.…

    • 4489 Words
    • 18 Pages
    Powerful Essays
  • Good Essays

    Woolworths Case Study Draft

    • 2554 Words
    • 11 Pages

    iii) Impairment loss on goodwill was a result of Woolworth’s announcement to restructure and divest the Consumer Electronics Business. The amount is also disclosed as ‘discontinued operations’ in Note 33 (Woolworths 2012, p 96) for $366.2M. AASB 5.32 defined discontinued operations to be a part of an entity that represents a separate line, or part, of business or…

    • 2554 Words
    • 11 Pages
    Good Essays
  • Good Essays

    Bad Debt Expense Memo

    • 947 Words
    • 4 Pages

    Your company has three uncollectible accounts which from three new customers: University of Hare-Brain, Dim-State University, and the College of Silly, each of them owned amount of $5,000 when they filed for bankruptcy. You decide whether to write the total $15,000 account payable off as a bad debt expense and report an operating loss, or just report these losses as extraordinary event and this method allow you to report $7,500 operating profit instead of report operating loss. Because you have to present your first year operating statement to a multi-national search company in order to sell your SEC filling search business, the decision you made will be really important for you under this circumstance. So the purpose for me to write this memo is to help my client, Dr Kealey to classify the uncollectable accounts and how to report these losses on the financial statement.…

    • 947 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Student

    • 1393 Words
    • 6 Pages

    Bibliography: "IAS Plus: IFRS 5 Non-current Assets Held for Sale and Discontinued Operations." Deloitte -- IASPlus. Web. 31 Mar. 2011. <http://www.iasplus.com/standard/ifrs05.htm>.…

    • 1393 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    Eps Notes

    • 988 Words
    • 4 Pages

    * Basic EPS figures on Discontinued Operations and Extraordinary Items must be disclosed, but may not be shown on the face of the Income Statement, in which case they are shown in the notes to the Financial Statements…

    • 988 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Revenue recognition under U.S. GAAP can vary depending on industry, but the criteria listed by Topic 13 are generally applied when recognizing revenue. Guidance for industry specific principles are covered under other U.S. GAAP pronouncements. Also under U.S. GAAP, “any costs or losses that may be expected in connection with any returns shall be accrued in accordance with FASB St. No. 5 Accounting for Contingencies. Sales revenue and costs of sales reported in the income statement shall be reduced to reflect estimated returns” (FAS 48 par. 7).…

    • 423 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    features

    • 2708 Words
    • 11 Pages

    In respect of companies other than finance companies, revenue from operations need to be disclosed separately as revenue from…

    • 2708 Words
    • 11 Pages
    Powerful Essays
  • Good Essays

    Accounting Theory

    • 827 Words
    • 4 Pages

    Question 3: Paragraph 81 states that if the amount of consideration to which an entity will be entitled is variable, the cumulative amount of revenue the entity recognizes to date should not exceed the amount to which the entity is reasonably assured to be entitled. An entity is reasonably assured to be entitled to the amount allocated to satisfied performance obligations only if the entity has experience with similar performance obligations and that experience is predictive of the amount of consideration to which the entity will be entitled. Paragraph 82 lists indicators of when an entity’s experience may not be predictive of the amount of consideration to which the entity will be entitled in exchange for satisfying those performance obligations. Do you agree with the proposed constraint on the amount of revenue that an entity would recognize for satisfied performance obligations?…

    • 827 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Income Statement

    • 1328 Words
    • 16 Pages

    4-4 Format of the Income Statement Elements of the Income Statement Revenues – Inflows or other enhancements of assets or settlements of its liabilities that constitute the entity’s ongoing major or central operations. Examples of Revenue Accounts   Dividend  Fee  Rent  4-5 Sales Interest Format of the Income Statement Elements of the Income Statement Expenses – Outflows or other using-up of assets or incurrences of liabilities that constitute the entity’s ongoing major or central operations. Examples of Expense Accounts   Rent  Depreciation  Salaries and wages  4-6 Cost of goods sold Interest  Taxes Format of the Income Statement Elements of the Income Statement Gains – Increases in equity (net assets) from peripheral or incidental transactions. Losses - Decreases in equity (net assets) from peripheral or incidental transactions. Gains and losses can result from   settlement of liabilities,  4-7 sale of investments or plant assets, write-offs of assets.…

    • 1328 Words
    • 16 Pages
    Powerful Essays
  • Satisfactory Essays

    Analysis of TSUI WAH

    • 369 Words
    • 2 Pages

    The company uses two statements for reporting its profit or loss and other comprehensive income. The following details is shown:…

    • 369 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Studies of accounting development in Malaysia more focus on the politics of multiculturalism. In Malaysia, the meaning and content of development in the 1970 and beyond is found in the New Economic Policy (NEP) which spells out the twin objectives of socio economic development for national unity, namely, the eradication of poverty irrespective of race and the restructuring of society. It is to eliminate racial economic predominance (S.Susila Dewi, Chapter 5: Economic and Accounting Development in Malaysia, Accounting Theory and Practice, a Malaysian Perspective. Pg 89-90.). Next, we provide a historical perspective of economic and accounting in Malaysia, focusing on the role played by the state, and its relationship to the various group within the economy. Economic policies are incorporated in the Five Year Development Plans, and the development in accounting as well as the emergence of interest group and their interaction with the state. Finally, we discuss the accounting development in Malaysia responded to the stages of economic development and the functions of the bodies that involve in standard development of accounting. Such as Malaysian Association of Certified Public Accountant (MACPA), Malaysia Institute of Accountant (MIA), Financial Reporting Foundation (FRF), and Malaysian Accounting Standard Board (MASB).…

    • 6483 Words
    • 20 Pages
    Good Essays
  • Good Essays

    1. Which method of depreciation is approved as per the income tax rules? a) Sinking fund method b) Written Down Value Method c) Annuity Method d) None of the above 2. Capital A/c is a _______ A/c. a) Personal b) Real c) Nominal d) None 3. Cash A/c is a ________ A/c. a) Personal b) Real c) Nominal d) None 4. Which is not only a subsidiary book, but also a principal book? a) Cash book b) Sales book c) Purchase book d) Bills receivable book 5. The principle “Debit the receiver and credit the giver” is related to_____ a) Personal a/c b) Real a/c c) Nominal a/c d) None 6. If shares are forfeited, Share Capital a/c is debited with ________ a) Called up face value b) Face value c) Paid up face value d) none of these 7. Wages paid for erection of machinery is debited to _____ a) Machinery A/c b) Wages A/c c) Cash A/c d) None of these 8. Share Premium A/c appears in the Balance Sheet under the heading. a) Current liabilities b) Reserves & Surplus c) Miscellaneous expenditure d) None of the above 9. The goods or cash taken by the proprietor for his personal use will be debited to _____ a) Expenditure a/c b) Debtors a/c c) Drawings a/c d) None of these 10. Interest on drawings is a ___ to the business a) Expenditure b) Gain c) Liability d) Loss 11. If a contingent liability becomes probable, it has to be: a) Shown in notes on accounts b) Provided in the books of accounts c)…

    • 3564 Words
    • 15 Pages
    Good Essays