Financial Accounting Standards Board For Discontinued Operations

1358 Words3 Pages

Reporting of discontinued operations
INTRODUCTION
The Financial Accounting Standards Board (FASB) has issued guidelines for reporting on discontinued operations April 10,2014. The rule reduce the number of disposal companies must present as discontinued operations in their financial operations in their financial statements. But they also expand the disclosures requirements when discontinued operations are reported. (LLP, 2014)
Discontinued operations are company assets or components that have either been disposed of or are being held for sale
The standard that has been revised is intended to address the concerns of financial statements users by changing the reporting criteria for discontinued operations. The FASB believes that the new standard meets the requirement as it reduces the number of disposals that would be included in discontinued operations and also because of more disclosures requirement, will provide information that will be useful to financial statements (Financial Accounting Standards Board, April 2014)
'To be a discontinued operation, a component or group of components must represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Companies should be prepared to exercise judgment to determine which disposals meet the new definition.
Failure to eliminate significant continuing cash flows of or involvement with disposed component from an entity’s ongoing operations after a disposal no longer precludes presentation as discontinued operation '. (PWC, 2014)
Under the revised standard, “a disposal of a component of an entity or a group of components of an entity shall be reported in discontinued operations if t...

... middle of paper ...

... standard and help to reduce the preparer cost. And it has also enhanced the financial statements decision usefulness and make the organization prepare for expanded disclosure requirements.

References
References
Bit, T. (2016). PWC. Retrieved from https://www.pwc.com/us/en/energy-mining/publications/assets/pwc-bit-discontinued-operations-accounting-standards.pdf
Comprehensive guide, F. R. (2014, November). Retrieved from file:///C:/Users/Robosap/Downloads/financialreportingdevelopments_bb1886_discontinuedoperations_12november2014.pdf
FASB IN FOCUS. (2014).
Financial Accounting Standards Board. (April 2014). Accounting Standards Update. Financial Accounting Series.
LLP, M. (2014). FASB revises reporting requirement.
PWC. (2014, June 3). Dataline. Retrieved from 'https://www.pwc.com/us/en/cfodirect/assets/pdf/dataline/dataline-2014-08-discontinued-operations.pdf

Open Document