ACCA FR · Chapter 3 · Question 12 of 12
Lapwing Co's leisure division is a discontinued operation. For the year its revenue was $4.0m and its expenses were $4.6m, and the related tax credit was $0.1m. On classification as held for sale, the division's assets were written down by $0.3m to fair value less costs to sell (no tax effect). What single amount should be presented as 'loss from discontinued operations' in the statement of profit or loss?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $0.8m
Explanation
IFRS 5 requires one figure on the face of the statement: the post-tax profit or loss of the discontinued operation plus the post-tax loss on remeasurement to fair value less costs to sell. Post-tax trading loss = 4.0 - 4.6 + 0.1 = -$0.5m. Adding the remeasurement loss of $0.3m gives a total loss of $0.8m.
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