Easy View Ltd had started business publishing training resource material in ring binder format for use in primary schools. Later it diversified into the hiring out of videos and had opened a chain of video hire shops. With the growing popularity of a mail order video/dvd supplier the video hire shops had become loss-making.
The company's yearend was 31 March and in February the financial director (FD) was asked to prepare a report for the board on the implications of closing this segment of the business.
The position at the board meeting on 10 March was as follows:
1. It was agreed that the closure should take place from 1 April 2010 to be completed by 31 May 2010.
2. The premises were freehold except for one that was on a lease with six years to run. It was in an inner city shopping complex where many properties were empty and there was little chance of sub-letting. The annual rent was £20,000 per annum. Early termination of the lease could be negotiated for a figure of £100,000. An appropriate discount rate is 8%.
3. The office equipment and vans had a book value of £125,000 and it was expected to realize £90,000, a figure tentatively suggested by a dealer who indicated that he might be able to complete by the end of April.
4. The staff had been mainly par t-time and casual employees. There were 45 managers, however, who had been with the company for a number of years. These were happy to retrain to work with the training resources operation. The cost of retraining to use publishing software was estimated at £225,000
5. Losses of £300,000 were estimated for the current year and £75,000 for the period until the closure was complete.
A week before the meeting the managing director made it clear to the FD that he wanted the segment to be treated as a discontinued operation so that the Continuing operations could reflect the profitable training segment's performance.

Required:
Draft the finance director's report to present to the MD before the meeting to clarify the financial reporting implications.