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ACCA Strategic Professional · Strategic Business Reporting (International) · Non-current assets

Cedar Group has a subsidiary, Dune, that it has committed to sell. Dune is a separate major line of business and meets the held-for-sale criteria at the reporting date. Which presentation is required in Cedar's consolidated financial statements?

Dune's assets and liabilities must be presented separately from other items without offsetting, and its post-tax results shown as a single discontinued operations line. IFRS 5 prohibits netting the disposal group's assets and liabilities and requires this separate presentation for a major line of business.

  1. ADune's assets and liabilities are netted and shown as one asset held for sale, with its results included line by line in continuing operations
  2. BDune's assets and liabilities are presented separately from other items, and its post-tax profit is shown as a single amount as a discontinued operationCorrect
  3. CDune's assets are shown separately but its liabilities remain within the normal liabilities of the group
  4. DDune's assets and liabilities remain in normal categories and only a note discloses the planned sale

Explanation

IFRS 5 requires assets of a disposal group and related liabilities to be presented separately and not offset. Because Dune is a major line of business, its post-tax result is presented as one amount for discontinued operations. Netting is prohibited.

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