Accounting Standard (AS) 24
(This Accounting Standard includes paragraphs set in bold italic type and plain type, which have equal authority. Paragraphs in bold italic type indicate the main principles. This Accounting Standard should be
read in the context of its objective and the Preface to the Statements of Accounting Standards.)
Accounting Standard (AS) 24,
‘Discontinuing Operations’, issued by the Council of the Institute of Chartered Accountants of India, comes into effect in respect of accounting periods commencing on or after 1.4.2004. This Standard ismandatory in nature2 in respectof accountingperiods commencing on or after 1-4-20043 for the enterprises which fall in any one or more of the following categories, at any time during the accounting period:
(i) Enterprises whose equity or debt securities are listed whether in India or outside India.
(ii) Enterprises which are in the process of listing their equity or debt securities as evidenced by the board of directors
’ resolution in this regard.
(iii) Banks including co-operative banks.
(iv) Financial institutions.
(v) Enterprises carrying on insurance business.
(vi) All commercial, industrial and business reporting enterprises, whose turnover for the immediately preceding accounting period on the basis of audited financial statements exceeds Rs. 50 crore. Turnover does not include ‘other income’.
(vii) All commercial, industrial and business reporting enterprises having borrowings, including public deposits, in excess ofRs. 10 crore at any time during the accounting period.
(viii) Holding and subsidiary enterprises of any one of the above at any time during the accounting period.
Earlier application is encouraged. The enterprises which do not fall in any of the above categories are not
required to apply this Standard. Where an enterprise has been covered in any one or more of the above
categories and subsequently, ceases to be so covered, the enterprise will not qualify for exemption from application of this Standard, until the enterprise ceases to be covered in any of the above categories for two consecutive
years. Where an enterprise has previously qualified for exemption fromapplication of this Standard (being not covered by any of the above categories) but no longer qualifies for exemption in the current accounting period, this Standard becomes applicable from the current period. However, the corresponding previous period figures need not be disclosed. An enterprise, which, pursuant to the above provisions, does not present the information relating to the discontinuing operations, should disclose the fact. The following is the text of the Accounting Standard.