F1M5 Flashcards
Discontinued operations are reported
separately from continuing operations, net of tax (after continuing operations)
3 items that are reported in discontinued operations
- impairment loss
- loss of operations
- loss on disposal
Discontinued operations reported in (periods)
current period; period that it incurs only
At what point is the entity in discontinued operations considered
when it has been disposed or classified as ‘held for sale’
Conditions to consider for discontinued operations
strategic shift or has a major effort of an entity’s operations
Initial impairment loss
when the selling price/NRV is less than the book value (carrying value)
Sebsequent increases in fair value
gain is recognized for any subsequent increase in fair value (minus the cost to sell) cannot be more than the previous loss
When does discontinued operations depreciation and amortization stop
when management decides to dispose of the component
How is discontinued operations measured
once it is held for sale, it is measured at THE LOWER OF carrying value (book value) or fair value less the amount to sell
How to calculate impairment in discontinued operations
the book value less the fair value
Discontinued operations disclosure
face or notes
Carrying value is the same as
book value
