Advanced AccountingQuestion 5306 of 305
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9. What would be the date of "initial disclosure of event" be considered for Bhopal Plant?

Options

A31st March, 2024
B1st March, 2024
C21st April, 2024
D10th March, 2024
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Correct Answer

Option D10th March, 2024

All Options:

  • A31st March, 2024
  • B1st March, 2024
  • C21st April, 2024
  • D10th March, 2024

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Detailed Solution & Explanation

Under AS 24 (Discontinuing Operations):
1. Discontinuing operation is a component of an enterprise that the enterprise is disposing of or terminating pursuant to a single plan.
2. The initial disclosure event is the occurrence of the following, whichever is earlier:
- Entering into a binding sale agreement.
- The board of directors approving a detailed, formal plan and making a formal announcement of it.
3. Board approved the plan on 1st March, 2024 and formally announced it on 10th March, 2024. The binding sale agreement was entered on 21st April, 2024.
4. Therefore, the date of initial disclosure event is 10th March, 2024.
Hence, **Option D** is the correct answer.

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