What is the treatment regarding profit on disposal of a subsidiary under operating activities?

The appropriate treatment for profit on disposal of a subsidiary under operating activities is that it is not included within the profit before tax (PBT) figure. This is because the profit on disposal of a subsidiary is typically considered a one-off or exceptional item, which does not form part of the ongoing operational performance of the business.

Instead, profit from the disposal of a subsidiary is shown separately within the financial statements, reflecting its nature as a non-operating activity or extraordinary gain. This presentation helps to provide a clearer view of the company's recurring operational profitability, as it distinguishes between ongoing business activities and transactions that are not part of normal operations.

By excluding this profit from PBT, stakeholders can better assess the company's ongoing performance without the influence of sporadic or non-recurring gains that may misrepresent the financial health if included in operating results.