Accounting Study Guide

U.S. GAAP
Financial Reporting Guide

Section 2240: Discontinued Operations

[U.S. GAAP Codification Topic]
205-20 Discontinued operations

[U.S. GAAP before the Codification]
SFAS 144, August 2001, Accounting for the Impairment or Disposal of Long-Lived Assets
EITF 03-13, 2003, Applying the Conditions in Paragraph 42 of FASB Statement No. 144 in Determining Whether to Report Discontinued Operations
EITF 87-24, 1987, Allocation of Interest to Discontinued Operations

1. The results of operations of (A) or (B) are
--> "reported in discontinued operations"
--> if both (1) and (2) are satisfied

(A) An entity's component that has been "disposed of"
(B) An entity's component that is "held for sale"

(1) Operations and cash flows are eliminated from ongoing operation
(2) The entity does not have significant "continuing involvement"

2. The results of discontinued operations are
--> reported as a "separate component of income"
--> "before" extraordinary items

3. Recognized gain or loss "on disposal" is
--> disclosed either (C) or (D)

(C) on the face of income statement
(D) in the notes to financial statements

4. International Financial Reporting Standards (IFRS)
IFRS 5: Non-current assets held for sale and discontinued operations