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Commission Regulation
(EC) No 2236/2004 of 29 December 2004 amending
Regulation (EC) No 1725/2003 adopting certain
international accounting standards in accordance with
Regulation (EC) No 1606/2002 of the European Parliament
and of the Council as regards International Financial
Reporting Standards (IFRSs) Nos 1, 3 to 5, International
Accounting Standards (IASs) Nos 1, 10, 12, 14, 16 to 19,
22, 27, 28, 31 to 41 and the interpretations by the
Standard Interpretation Committee (SIC) Nos 9, 22, 28
and 32
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Presentation and disclosure
30. An entity
shall present and disclose information that enables users of
the financial statements to evaluate the
financial effects of discontinued operations and disposals
of non-current assets (or disposal groups).
Presenting discontinued operations
31. 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.
In other words, a component of an entity will have been a
cash-generating unit or a group of cash-generating units
while being held for use.
32. A discontinued
operation is a component of an entity that either has been
disposed of, or is classified as held for sale, and
(a) represents
a separate major line of business or geographical area
of operations,
(b) is part of
a single co-ordinated plan to dispose of a separate
major line of business or geographical area of
operations or
(c) is a
subsidiary acquired exclusively with a view to resale.
33. An entity
shall disclose:
(a) a single
amount on the face of the income statement comprising
the total of:
(i) the
post-tax profit or loss of discontinued operations
and
(ii) the
post-tax gain or loss recognised on the measurement
to fair value less costs to sell or on the disposal
of
the assets or disposal group(s) constituting the
discontinued operation.
(b) an
analysis of the single amount in (a) into:
(i) the
revenue, expenses and pre-tax profit or loss of
discontinued operations;
(ii) the
related income tax expense as required by paragraph
81(h) of IAS 12;
(iii) the
gain or loss recognised on the measurement to fair
value less costs to sell or on the disposal of the
assets
or disposal group(s) constituting the discontinued
operation;
(iv) the
related income tax expense as required by paragraph
81(h) of IAS 12. The analysis may be presented in
the notes or on the face of the income statement. If
it is presented on the face of
the income statement it shall be presented in a
section identified as relating to discontinued
operations, ie separately
from continuing operations. The analysis is not
required for disposal groups that are newly acquired
subsidiaries
that meet the criteria to be classified as held for
sale on acquisition (see paragraph 11).
(c) the net
cash flows attributable to the operating, investing and
financing activities of discontinued operations. These
disclosures may be presented either in the notes or on
the face of the financial statements. These disclosures
are
not required for disposal groups that are newly acquired
subsidiaries that meet the criteria to be classified as
held
for sale on acquisition (see paragraph 11).
34. An entity
shall re-present the disclosures in paragraph 33 for prior
periods presented in the financial statements so that
the disclosures relate to all operations that have been
discontinued by the balance sheet date for the latest period
presented.
35. Adjustments in
the current period to amounts previously presented in
discontinued operations that are directly related
to the disposal of a discontinued operation in a prior
period shall be classified separately in discontinued
operations. The
nature and amount of such adjustments shall be disclosed.
Examples of circumstances in which these adjustments may
arise include the following:
(a) the resolution of uncertainties that arise from the
terms of the disposal transaction, such as the resolution of
purchase price adjustments and indemnification issues with the
purchaser.
(b) the resolution
of uncertainties that arise from and are directly related to
the operations of the component before its disposal, such as environmental and product warranty
obligations retained by the seller.
(c) the settlement of employee benefit plan obligations,
provided that the settlement is directly related to the
disposal transaction.
36. If an entity ceases to classify a component of an entity
as held for sale, the results of operations of the component
previously
presented in discontinued operations in accordance with
paragraphs 33-35 shall be reclassified and included in
income from continuing operations for all periods presented.
The amounts for prior periods shall be described as having
been re-presented.
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