financial statements disclosures discontinued operation

[Yakub02]

These disclosures may be presented in the notes or on the face of the financial statements. These disclosures are not required for disposal groups that are newly acquired subsidiaries that are classified as held for sale on acquisition

Comparatives must be restated for these disclosures so that the disclosures relate to all operations that have been discontinued by the reporting date for the latest period presented.

Presentation in the statement of financial position Non-current assets classified as held for sale must be disclosed separately from other assets in the statement of financial position. Similarly, assets and liabilities that are part of a disposal group held for sale must be disclosed separately from other assets and liabilities in the statement of financial position. This also applies to the assets and liabilities of a discontinued operation.

In the statement of financial position, the comparative figures for the previous year are not restated. The amount for discontinued operations in the previous year does not include discontinued items for the current year. The presentation in the statement of financial position therefore differs from the presentation in the statement of profit or loss.

Sometimes there is a need to adjust amounts previously presented in discontinued operations that are directly related to the disposal of a discontinued operation in a prior period. For example, circumstances in which these adjustments may arise include the resolution of uncertainties

 

[Yakub02]

The distinction between operating and financial leases is arbitrary and unsatisfactory.

IAS 17 did not provide for the recognition in lessees’ balance sheets of material assets and liabilities arising from operating leases.

Comparability (and hence usefulness) of financial statements will be enhanced by replacing the old treatment with an approach that applied the same requirements to all leases. IFRS 16 removes the finance lease, operating lease distinction for lessees.

The new rules require a lessee to recognise all leases on its statement of financial position (with certain exceptions).

IFRS 16 does not change how lessors should account for leases. Lessors still must classify leases as either finance leases or operating leases and account for them accordingly in the same way as before.

 

[Yakub02]

IFRS 16 applies to all leases except for:  leases to explore for or use minerals, oil etc.;

 leases of biological assets (IAS 41);

 service concession arrangements (IFRIC 12);

 licences of intellectual property granted by a lessor (within the scope of IFRS 15); and

 rights held under licensing agreements within the scope of IAS 38 e.g. patents and copyrights (a lessee can, but is not required to, apply IFRS 16 to leases of other intangible assets).

IFRS 16 specifies the accounting for an individual lease.

However, as a practical expedient the rules can be applied to a portfolio of leases with similar characteristics as long as there is a reasonable expectation that the effects on the financial statements would not differ materially from applying the rules to the individual leases of the portfolio.