How are discontinued operations measured under IFRS?

Discontinued operations are measured under IFRS at the lower of their carrying value and fair value less costs to sell. This approach reflects the intention to provide a clear and fair representation of the financial position regarding operations that are no longer part of the ongoing business activities. By measuring at the lower of these two values, it ensures that the assets are not overstated and that any potential loss from the discontinuation is appropriately recognized. This framework helps users of financial statements to assess the impact of discontinuation on the overall financial health of the entity, providing insight into the future profitability and sustainability of the remaining operations.

The other options do not align with the measurement principles set forth by IFRS for discontinued operations. For example, using book value plus accrued income would potentially inflate the reported values by including unrealized gains. Measuring at direct costs of selling or estimated liquidation value would not accurately capture the fair value considerations required by IFRS. Thus, the chosen method ensures compliance with the standards while maintaining transparency and relevance in financial reporting.