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CA Intermediate · Advanced Accounting · AS 24 Discontinuing Operations

Ganga Engineering Ltd is discontinuing its Foundry division. For the year ended 31 March 2026 the financial statements disclose the discontinuing operation. In the following year's financial statements, which treatment of the AS 24 disclosures is required?

The AS 24 disclosures must continue in financial statements of periods after the initial disclosure event until the discontinuance is completed, including the period of completion. They are not limited to the first year, nor replaced by a note on sale proceeds alone.

  1. ADisclosures are repeated in financial statements until the period in which the discontinuance is completedCorrect
  2. BDisclosures are dropped as soon as the next year begins
  3. CDisclosures are required only in the year of the initial disclosure event
  4. DDisclosures are replaced by a note stating only the total sale proceeds

Explanation

AS 24 requires the disclosures to continue in financial statements for periods after the initial disclosure event until the discontinuance is completed (or abandoned). In the period in which it is completed, the disclosures are also given, including a description of the completion. Dropping them after the first year or giving only the sale proceeds does not comply.

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