Under IFRS 5 ‘An entity shall present and disclose information that enables users of the financial statements to evaluate the financial effects of discontinued operations and disposals of non-current assets (or disposal groups)’.
IFRS 5 – Non-current assets held for sale and discontinued operations requires entities that have sold, or plan to sell non-current assets to provide certain disclosures in relation to those assets.
The reason these disclosures are required is because by closing down or selling some operations, this will affect the future financial prospects of the entity.
By disclosing relevant information about these discontinued operations, the users of the financial statements can make a more reliable prediction of the future financial performance of the entity.