Manco has been experiencing substantial losses at its furniture making operation which is treated as a separate operating segment. The company’s year end is 30 September. At a meeting on 1 July 2010 the directors decided to close down the furniture making operation on 31 January 2011 and then dispose of its non-current assets on apiecemeal basis. Affected employees and customers were informed of the decision and a press announcement was made immediately after the meeting. The directors have obtained the following information in relation to the closure of the operation:(i) On 1 July 2010, the factory had a carrying amount of $3·6 million and is expected to be sold for net proceeds of $5 million. On the same date the plant had a carrying amount of $2·8 million, but it is anticipated that it will only realise net proceeds of $500,000.(ii) Of the employees affected by the closure, the majority will be made redundant at cost of $750,000, the remainder will be retrained at a cost of $200,000 and given work in one of the company’s other operations.(iii) Trading losses from 1 July to 30 September 2010 are expected to be $600,000 and from this date to the closure on 31 January 2011 a further $1 million of trading losses are expected.Required:
参考答案：From the information in the question, the closure of the furniture making operation is a restructuring as defi ned in IAS CG Provisions, contingent liabilities and contingent assets and, due to the timing of the decision, a provision for the closure costs will be required in the year ended C0 September B0A0. Although the Standard says that a Board of directors’ decision to close an operation is alone not suffi cient to trigger a provision the other actions of the management, informing employees, customers and a press announcement indicate that this is an irreversible decision and that therefore there is an obligating event.Commenting on each element in turn for both years:(i) Factory and plant At C0 September B0A0 – these assets cannot be classed as ‘held-for-sale’ as they are still in use (i.e. generating revenue) and therefore are not available for sale. Both assets will therefore continue to be depreciated.Despite this, it does appear that the plant is impaired. Based on its carrying amount of $B·H million an impairment charge of $B·C million ($B·H million – $0·E million) would be required (subject to any further depreciation for the three months from July to September B0A0). The expected gain on the sale of the factory cannot be recognised or used to offset the impairment charge on the plant. The impairment charge is not part of the restructuring provision, but should be reported with the depreciation charge for the year.At C0 September B0AA – the realised profi t on the disposal of the factory and any further loss on the disposal of the plant will both be reported in the income statement.(ii) Redundancy and retraining costsAt C0 September B0A0 – a provision for the redundancy costs of $GE0,000 should be made, but the retraining costs relate to the ongoing actives of Manco and cannot be provided for.At C0 September B0AA – the redundancy costs incurred during the year will be offset against the provision created last year. Any under- or over-provision will be reported in the income statement. The retraining costs will be written off as they are incurred.(iii) Trading lossesThe losses to C0 September B0A0 will be reported as part of the results for the year ended C0 September B0A0. The expected losses from A October B0A0 to the closure on CA January B0AA cannot be provided in the year ended C0 September B0A0 as they relate to ongoing activities and will therefore be reported as part of the results for the year ended C0 September B0AA as they are incurred.It should also be considered whether the closure fulfi ls the defi nition of a discontinued operation in accordance with IFRS E Non-current assets held for sale and discontinued operations. As there is a co-ordinated plan to dispose of a separate major line of business (the furniture making operation is treated as an operating segment) this probably is a discontinued operation. However, the timing of the closure means that it is not a discontinued operation in the year ended C0 September B0A0; rather it is likely that it will be such in the year ended C0 September B0AA. Some commentators believe that this creates an anomalous situation in that most of the closure costs are reported in the year ended C0 September B0A0 (as described above), but the closure itself is only identified and reported as a discontinued operation in the year ended C0 September B0AA (although the comparative fi gures for B0A0 would then restate this as a discontinued operation).