An Asc on discontinued operations can classify equity method investments as held for sale under IFRSs but is not permitted to do so under U. A component of an entity Asc on discontinued operations be classified as a discontinued operation if all of the following conditions are met: The new definition is expected to reduce the number of transactions that are accounted for as a business combination across all industries.
GAAP, ASC and indicate that the component can only be classified as a discontinued operation if it has been disposed of or is classified as held for sale and 1 "[t]he operations and cash flows of the component have been or will be eliminated from the ongoing operations of the entity as a result of the disposal transaction" and 2 "[t]he entity will not have any significant continuing involvement in the operations of the component after the disposal transaction.
The entity will not have any significant continuing involvement in the operations of the component after the disposal transaction. Early adoption is permitted for any impairment test performed after January 1, The components of an entity that are considered discontinued operations under IFRSs are generally similar to the operating-segment levels under U.
The operations and cash flows of the component have been or will be eliminated from the ongoing operations of the entity as a result of the disposal transaction. The guidance is effective for Q1 for calendar year-end public business entities that are SEC filers and Q1 for calendar year-end public business entities that are not SEC filers and Q1 for calendar year-end nonpublic entities.
Early adoption is permitted. GAAP regarding the level of reporting discontinued operations. Public business entities as well as not-for-profit entities that have issued, or that are conduit bond obligors for, securities that are traded, listed, or quoted on an exchange or over the counter will apply ASU prospectively to all disposals or classifications as held for sale that occur in annual periods and interim periods therein beginning on or after December 15, The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation.
Under IFRSs, paragraph 32 of IFRS 5 indicates that the component can only be classified as a discontinued operation if it has been disposed of or classified as held for sale and it 1 "represents a separate major line of business or geographical area of operations;" 2 "is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations;" or 3 "is a subsidiary acquired exclusively with a view to resale.
Simplifying the Accounting for Goodwill Impairment, in January to simplify the accounting for goodwill impairment. Definition of a Discontinued Operation Although both U. The table below summarizes these differences and is followed by a detailed explanation of each difference.
Represents a separate major line of business or geographical area of operations. This joint project may lead to the issuance of revised U. The guidance will be applied prospectively.
Clarifying the Definition of a Business, in January that changes the definition of a business. Key differences between U. The guidance is effective for Q1 for calendar year-end public business entities and for calendar year-end nonpublic entities. The FASB and the IASB are working on a joint project to converge their 1 definition of a discontinued operation and 2 disclosure requirements for all components of an entity that have been or will be disposed of.
GAAP guidance that would eliminate the differences in the reporting of discontinued operations described in this comparison. Listen to our minute podcast to learn more about the new definition of a business and the impacts - both direct and indirect - on various areas of accounting.
The guidance will be applied prospectively to any transactions occurring within the period of adoption. For all other entities, ASU will be effective prospectively for annual periods beginning on or after December 15,and interim periods thereafter.
Is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations, or Is a subsidiary acquired exclusively with a view to resale.
Therefore, discontinued operations may be reported more frequently under U.Apr 24, · The FASB issued ASU * on April 10,which amends the definition of a discontinued operation in ASC and requires entities to provide additional disclosures about disposal transactions that do not meet the discontinued-operations criteria.
The revised guidance will change how. Presentation of Financial Statements, Discontinued Operations, ASC Accountinginfo December 9 “Applying the Conditions in Paragraph 42 of FASB Statement No.
in Determining Whether to Report Discontinued Operations Costs of software to be sold, leased, or marketed, ASC ; Servicing Assets and Liabilities. U.S. GAAP and IFRS with respect to discontinued operations. Refer to ASC and IFRS 5 for all of the specific requirements applicable to discontinued operations.
Accounting Standards Update Presentation of Financial Statements (Topic ) and Property, Plant, and Equipment (Topic ) Reporting Discontinued Operations and.
We are pleased to present the edition of A Roadmap to Reporting Discontinued Operations. This Roadmap provides Deloitte’s insights into and interpretations of the accounting guidance on reporting discontinued operations in ASC In Aprilthe FASB issued ASUwhich elevates the threshold for presenting a disposal.
Discontinued operations is also an issue the FASB addressed as it kicks off its simplification initiative (mentioned in the last issue) to reduce complexity in accounting rules. For more details on the new standard, you can read the FASB in Focus and watch a video featuring FASB member Tom Linsmeier and project manager Phil Hood.Download