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Today is January 3, Year 5. On December 31, Year 4, the board of directors of TMT Corporation, a company using

IFRS, approved a plan to sell the company's Toy division. The Toy division meets the definition of a "component" of TMT, and the assets and liabilities of the Toy division meet the criteria of "held for sale".


The company reviewed the capital assets associated with the Toy division and determined that their fair value, less costs to sell, is $205 million compared to a net book value of $225 million. As well, future losses of $12 million are expected to be incurred in fulfilling the contract obligations up to September 30, Year 5, after which time an actual disposal is expected to occur. The Toy division had incurred before-tax operating losses of $88 million in Year 3 and $62 million in Year 4.


In December Year 4, the provincial government expropriated some land needed expand a highway. Under the terms of the expropriation, the government paid $1.8 million to TMT and took possession of the land. The land was on TMT's book at a cost of $600,000.


The tax rate on all of the above items is TMT Corporation's average income tax rate of 25%.


Assume that earnings from all other sources, before income taxes, were $368 million in Year 3 and $260 million in Year 4. This does not include any amounts pertaining to the toy division nor does it include the expropriation of the land transaction.



(a)  Does the expropriation of the land transaction require special presentation on the comprehensive income statement? Explain.

(b)    Prepare the comprehensive income statement for TMT Corporation for Year 4, beginning with income from continuing operations before tax (i.e. the $368 million and the $260 million above). Also show the comparative amounts for Year 3.

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