The IASC/IASB has issued accounting standards that concentrate on the issue of repor ting financial per formance. The main standards that repor t this are:

IAS 1 Presentation of Financial Statements IAS 14 Segment Repor ting IFRS 5 Non-cur rent Assets held for Sale and Discontinued Operations All of these accounting standards require companies to give disclosures or fur ther presentation on the face of the financial statements to help users understand the per formance of the enterprise. These fur ther disclosures improve the quality of the information in the financial statements and therefore should improve the decisions taken by users in response to the financial statements.

Required:

(a) Describe how the statement of changes in equity (from IAS 1), segmental disclosures and discontinued operations disclosures will help investors and lenders make decisions based on the financial statements.

(b) Bedok Ltd has three divisions: a paper manufacturing division, a printing division and a clothing manufacturing division. On 1 April 20X9 the directors of Bedok Ltd decided to sell the clothing division as it was not in line with the core activities of the company. This decision was announced to the employees and the public on 1 June 20X9. The net assets of the clothing division as at 31 December 20X9 were £16 million (£20 million assets less £4 million liabilities).

On 10 May 20Y0 the board signed an agreement with Woodlands Ltd to sell the clothing division for £20 million. The net assets of the clothing division at this date were £18 million (£23 million assets and £5 million liabilities). Bedok Ltd incurred redundancy costs of £1 million which had been expected from the date the decision to sell the division was made. The redundancy costs are not reflected in the income statement information given below. The sale was completed on 1 July 20Y0 and the clothing division did not trade between 10 May 20Y0 and 1 July 20Y0.

The results of the clothing manufacturing division for 20X9 and 20Y0 are as follows:

20X9 20Y0 (to 1 July)
£000 £000 Turnover 65,000 40,000 Expenses (50,000) (32,000)
Operating profit 15,000 8,000 Tax charge (5,000) (3,000)
Prepare extracts from the financial statements (including notes) of Bedok Ltd for 31 December 20X9 and 20Y0 in accordance with IFRS 5, including all relevant information on the face of the income statement.