AS 24 and AS 25 Advanced Accounting Test: Discontinuing Operations and Interim Reporting Questions

The paper gives three questions with mark allocations of 6, 8 and 6, totalling 20 marks. Questions 1 and 2 ask students to judge whether gradual phasing out, a resolution to sell assets, or a time-bound sale of a division meets the definition of a discontinuing operation under AS 24. Question 3 lists six items from a quarter's accounts, such as dividend income, deferred sales promotion expenses, a change in depreciation method, extraordinary gains and an inventory valuation change, and asks for the adjusted profit before tax under AS 25.

Attempt the test within the stated 40 minutes of solving time after a 15-minute reading period. For each question, first identify the relevant recognition or definition criteria in the standard, then apply them to the facts given. For Question 3, go item by item and state whether each amount is recognised in full, apportioned, or deferred, since AS 25 generally expects interim items to be recognised as they would be in annual statements. Compare your answers with the standard text to check your reasoning.

This test is useful for CA Inter students who are working through AS 24 and AS 25 in the Advanced Accounting syllabus and want to practise written answers. It is also useful for students revising how discontinuing operations are identified and how interim reporting rules limit the deferral and apportionment of quarterly items. Students who find the concepts unclear may read the test alongside the standards themselves before attempting it under timed conditions.

• AS 24 Discontinuing Operations
• Definition of a discontinuing operation
• Phasing out versus formal disposal plans
• Sale of assets and transfer of assets to a new factory
• AS 25 Interim Financial Reporting
• Treatment of dividend income in interim periods
• Deferral and apportionment of expenses in interim periods
• Change in depreciation method and extraordinary items in interim reports