M1- F5 - Income Statement: Discontinued Operations Flashcards
Accounting for discontinued operations can consist of gain/loss on (3)
current operations, gain/loss on sale, and impairment loss.
Discontinued operations are shown ________
net of tax.
A ______ of an entity is a part of an entity (the lowest level) for which operations and cash flows can be clearly distinguished, both operationally and for financial reporting purposes, from the rest of the entity.
component
The results of operations of a component of an entity or a group of components of an entity, or a business or nonprofit activity, will be reported in discontinued operations if it has been ______ or is classified as ____________
disposed of, held for sale.
The disposal must represent a ______ that has or will have a _______ on an entity’s operations and financial results to be reported as a discontinued operation.
strategic shift, major effect
How are assets he’d for sale deprecated?
They are not deprecated
Assets held for sale are valued at
Lesser of BV or NRV
To be classified as held for sale, what are the criteria must be met (4)
1) Management has a plan, 2) Component is availed for immediate sale 3) Sale of the component is probable & Expected within one year 4) Being actively marketed, 5) Significant changes are unlikely
A disposal is reported in _____ if the disposal is a strategic shift
Discounted Operations net of tax
What are the types of items included in results of Disc Ops
1) Impairment loss, 2) results of ops, 3) G/L on disposal
What are the steps for calculating Gain or loss on discounted operations
1) Calculate any initially and subsequent impairment losses (Selling price < Book Value , 2) Calculate any operating loss/gain for the year. 3) When sold, calculate gain or loss on discounted business.
For Discounted Op loss, you can only reverse up to _________
The initial impairment loss amount (Nothing more)
