Discontinued Operations Flashcards
1
Q
When a discontinued operation is sold
A
Operating Income AND the Gain/loss on the sale are netted AND put at bottom of Income Statement of current year.
2
Q
When a operation meets the rules for “Held for Sale”
A
ONLY the Operating income is put at the bottom of the income statement as discontinued
3
Q
When a operation is “Held for Sale” and also sold
A
Gain or loss is included with Operating income at bottom of income statement
4
Q
When a operation is “Held for Sale” but not sold
A
Only impairment loss is recognized.
Book Value - (Fair value - Cost to sell)
5
Q
A segment is discontinued if
A
It can be distinguished and
Cash Flows generated are used to make decisions
6
Q
A segment is NOT discontinued if
A
grouped with several other assets
