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AS 24 Discontinuing operations

gokul (Accountant) (126 Points)

25 May 2010

A ltd has two subsidiaries B ltd and C ltd.
If C ltd is to be closed off, whether disclosures
as per AS 24 Discontinuing operations is applicable
in respect of the Consolidated Fianancial Statements of A ltd.

Thanks

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3 Replies

jigar (Finance Analyst) (50 Points)
Replied 25 May 2010

Originally posted by : gokul
	A ltd has two subsidiaries B ltd and C ltd. If C ltd is to be closed off, whether disclosures as per AS 24 Discontinuing operations is applicable in respect of the Consolidated Fianancial Statements of A ltd. Thanks

Hi,

are these subsidiaries engaged in the same activities as those of parent company.

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KUSHAL AGRAWAL (CA Final Student) (128 Points)
Replied 25 May 2010

hi mr. gokul ,

suppose if there is a sale off because of certain circumstances which are of material nature , which have a effect on going conern itself , then a disclousr is important in notes to account as per as-24

ur question is not specific..

still suppose the subsidaries are also engaged in same business line which holding co. is , still selling a subsidiary doesnt neccesarily satisy the definition and condition given in AS-24. But it might be discontinuing operation as per as-24 in combination with other circumstances in particular facts n circumstances

gokul (Accountant) (126 Points)
Replied 27 May 2010

The activities of the parent and the subsidiary which is to be sold off is completely different. There will only be A ltd (holding co) and its other subsidiary B Ltd. I also appreciate that it is not appropriate to assume the going concern concept as far as C ltd is concerned.

However Iam not clear whether the disclosure as per AS 24 is applicable say

1. only when one of the units / operations of A ltd is to be discontinued - therefore the same is disclosed in the stand alone financial statements of A ltd or

2. when a subsidiary's business (unrelated with the business of holding co) is dispossed or discontinued - whether disclosure as per AS 24 is required in the consolidated financial statements of the holding co (not the stand alone financial statement of A ltd).

Thanks