Discontinued Operations (F1:M5)

Question 1

when will the results of operations of a component, a group of components, business, or nonprofit be reported in discontinued operations?

Answer 1

has been disposed of
or
is classified as held for sale

Question 2

once management decides to dispose of a component, are assets within the component still depreciated/amortized?

Answer 2

no.

Question 3

how are components classified as held for sale measured?

Answer 3

at the lower of carrying amount or FV less costs to sell.

Question 4

how are discontinued operations presented in the income statement?

Answer 4

net of tax, below income from continuing operations

Question 5

what types of items are included in results of discontinued operations? (3 things)

Answer 5

results of operations (for entire year)
G/L on disposal (in yr of disposal)*
impairment G/L (in yr held for sale)*
*(FV less costs to sell - BV)

Question 6

which losses should be included in the income statement for the year, those that occurred before or after the date the decision was made to dispose of the component?

Answer 6

both. losses for the entire year related to the discontinued operation must be included

Question 7

a component that is actively being marketed should be valued how?

Answer 7

lower of its BV or NRV (FV - costs to sell)