Answered: True or False 1. When there is a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

True or False

1. When there is a change in the plan to sell a held for sale asset, that asset is reclassified back to its previous classification and measured at its carrying amount before it was classified as held for sale, adjusted for any depreciation, amortization or revaluation that would have been recognized had the asset not been classified as held for sale.

2. Profit from continuing operation does not include extraordinary items, discontinued operations, or cumulative effects of changes in accounting principles.

3. A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity.

4. A component of an entiry can be cash generating unit or group of cash generating units.

Use the following information for the next two questions:

An entity, a brewer of beer, has three major product lines - Brand A, Brand B and Brand C. Each product line comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. On March 1, 20x1, tthe entity commits to a plan to sell Brand A to another compan. All the conditions for classification as held for sale under PFRS 5 are met.

5. The results of operations of Brand A from March 1, 20x1 until the date of its disposal shall be excluded from continuing operations and shall be presented as a single amount net of tax.

6. When the 20x1 financial statements are issued, the comparative financial statements of the preceding period shall be restated to exclude the results of operations of Brand A from continuing operations.

7. Closing down one plant of three making the same product would be reported as discontinued operations.

8. To qualify as a discontinued operation for reporting purposes, the assets and related activities of the segment must be clearly distinguishable from other assets, operating results, and general activities of the company, both physically and operationally, as well as for financial reporting purposes.

9. Profit for the year includes discontinued operations

10. A subsidiary acquired exclusively with a view to resale may qualify as a discontinued operation.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 5 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Financial Reporting in Hyperinflationary Economies

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions