Assume that Elrond Inc. decided to sell DemandTV Ltd., a subsidiary, on September 30, 2017. There is a formal plan to dispose of the business component, and the sale qualifies for discontinued operations treatment. Pertinent data on the operations of the TV subsidiary are as follows: loss from operations from beginning of year to September 30, $1.9 million (net of tax); loss from operations from September 30 to end of 2017, $700,000 (net of tax); estimated loss on sale of net assets to December 31, 2017 (net of tax), $150,000. The year end is December 31. Elrond prepares financial statements in accordance with IFRS.

Instructions

(a) What is the net income/loss from discontinued operations reported in 2017?

(b) Prepare the discontinued operations section of the income statement for the year ended 2017.

(c) If the amount reported in 2017 as a gain or loss from disposal of the subsidiary becomes materially incorrect, when and how is the correction reported, if at all?

(d) How would the discontinued operation be presented on the balance sheet?

(e) How would your answer to part (d) be different if Elrond prepared financial statements in accordance with ASPE?