Varnay Ltd is a manufacturing company which prepares annual financial statements to 31 December. In November 2017, the company announced a plan to close down one of its manufacturing operations and to sell off the assets of that operation. The operation will be closed down over a period of approximately nine months and closure is expected to be complete by the end of July 2018. Sale of the operation's assets is expected to take place in September 2018.

Explain how this closure and sale should be dealt with in the financial statements of Varnay Ltd for the year to 31 December 2017 and for the year to 31 December 2018.