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CA Intermediate · Advanced Accounting · AS 24 Discontinuing Operations

Under AS 24, how should a company present the comparative information for prior periods in financial statements that contain disclosures about a discontinuing operation?

Comparative information for prior periods must be restated so that the continuing and discontinuing amounts are separately presented for every period shown. This allows users to compare like with like, so leaving prior period figures unchanged is not permitted.

  1. APrior period figures are left unchanged and no restatement is made
  2. BOnly the current year disclosures are shown and prior periods are omitted
  3. CDisclosures for prior periods are restated so that the disclosures relating to discontinuing operations are presented for all periods shownCorrect
  4. DPrior period figures are shown only in the board report

Explanation

AS 24 requires that comparative information for prior periods presented in financial statements be restated to segregate continuing and discontinuing assets, liabilities, income, expenses and cash flows. This ensures that users can compare like with like. Leaving prior figures unchanged would defeat that purpose.

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