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on Horse Manufacturing Corporation, a maker of train engines and cars, is contemplating disposing of its Coach Car Company, which is one of its primary
on Horse Manufacturing Corporation, a maker of train engines and cars, is contemplating disposing of its Coach Car Company, which is one of its primary business segments. It lans to focus on engine manufacturing, where it has experienced significant growth. Iron Horse is considering the sale of Coach Car within the next 18 months but has not yet mac firm commitment. Would the disposal of Coach Car qualify as a discontinued operation under IFRS? A. The disposal of the Coach Car would not qualify as a discontinued operation under IFRS. Even though Coach Car meets the requirement of being a primary business segment, the discontinued operation is not a component of an entity held for sale and has not been disposed because Coach Car is not yet held for sale. It also appears that Iron Horse's management has not developed a plan to dispose of Coach Car. B. The disposal of the Coach Car would qualify as a discontinued operation under IFRS. Because Coach Car meets the requirement of being a primary business segment, the discontinued operation is a component of an entity held for sale. It also appears that Iron Horse's management has developed a plan to dispose of Coach Car. C. The disposal of the Coach Car would not qualify as a discontinued operation under IFRS. Coach Car does not meet the requirement of being a primary business segment; therefore, the discontinued operation is not a component of an entity held for sale and has not been disposed because Coach Car is not yet held for sale. It appears, though, that Iron Horse's management has developed a plan to dispose of Coach Car. D. The disposal of the Coach Car would qualify as a discontinued operation under IFRS. Because Coach Car meets the requirement of being a primary business segment, the discontinued operation is a component of an entity held for sale. Operations for which a disposal is planned within 24 months qualifies as a discontinued operation under IFRS
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