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CA Intermediate · Advanced Accounting · AS 24 Discontinuing Operations

Godavari Foods Ltd. has a discontinuing operation. Under AS 24, which of the following must be disclosed in the financial statements for the period in which the initial disclosure event occurs?

AS 24 requires disclosure of the pre-tax gain or loss recognised on disposal of assets or settlement of liabilities attributable to the discontinuing operation, along with the related tax. Employee names, director pay and the buyer's margins are not required disclosures.

  1. AThe amount of pre-tax gain or loss recognised on disposal of assets or settlement of liabilities attributable to the discontinuing operationCorrect
  2. BThe names of all employees who will be retrenched
  3. CThe personal remuneration of the directors overseeing the sale
  4. DThe expected profit margin of the buyer after the acquisition

Explanation

AS 24 requires, among other things, a description of the discontinuing operation, the date and nature of the initial disclosure event, the segment in which it is reported, and the amount of pre-tax gain or loss on disposal of assets and settlement of liabilities, with related income tax. The other items are not required by AS 24.

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