Billy’s Burgers (BB) is a franchisor that operates several
corporate-owned restaurants as well as several franchised
restaurants. The franchisees pay 3% of their sales revenues to BB
in return for advertising and support. During the year, BB sold its
corporate-owned stores to a franchisee. BB continues to monitor
quality in its franchised operations and franchisees must buy all
products from it. The corporate-owned stores are not considered a
separate major line of business.
Would the sale qualify for discontinued operations
treatment?
The sale (would not, would) qualify for discontinued operations treatment under IFRS. |
IFRS 5 : Non current asset held for sale and Discountinued Operations
Discontinued Operation is the component of the entity that is sold or held for sale. and which will includes :
A branch or business in seperate geographical location or subsidiary or major line of business will be a Component of Entity when billy burgers can able to prepare financial records like statement of profit or loss, statement of cash flow , revenue , cost of goods etc seperately .
Therefore the sales of corporate owned store would not qualify for Discountinued Operation treatment under IFRS.
Billy’s Burgers (BB) is a franchisor that operates several corporate-owned restaurants as well as several franchised...
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