How transaction should be reflected in financial statements

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On 20 October 20X8 the directors of a company (Metal Works) made a public announcement of plans to close a steel works. The closure means that the company will no longer carry out this type of operation, which until recently has represented about 10% of its total revenue. The works will be gradually shut down over a period of several months, with complete closure expected in July 20X9. At 31 December 20X8 output had been significantly reduced and some redundancies had already taken place. The cash flows, revenues and expenses relating to the steel works can be clearly distinguished from those of the company's other operations.

Question 1: Explain, based on the information available, how this transaction should be reflected in the financial statements of Metal Works for the year ended 31 December 20X8.

Reference no: EM132983992

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