Accounting HW

(FASB, 2016, ASC ¶ 205-20-50-1)

The following shall be disclosed in the notes to financial statements that cover the period in which a long-lived asset ( disposal group ) either has been sold or is classified as held for sale under the requirements of paragraph  360-10-45-9 :

· a.  A description of the facts and circumstances leading to the expected disposal, the expected manner and timing of that disposal, and, if not separately presented on the face of the statement, the carrying amount(s) of the major classes of assets and liabilities included as part of a disposal group

· b.  The gain or loss recognized in accordance with paragraphs  360-10-35-40  and  360-10-40-5  and if not separately presented on the face of the income statement, the caption in the income statement or the statement of activities that includes that gain or loss

· c.  If applicable, amounts of revenue and pretax profit or loss reported in discontinued operations

· d.  If applicable, the segment in which the long-lived asset (disposal group) is reported under Topic  280 .

(FASB, 2016, ASC ¶ 360-10-34-40)

A loss shall be recognized for any initial or subsequent write-down to fair value less cost to sell. A gain shall be recognized for any subsequent increase in fair value less cost to sell, but not in excess of the cumulative loss previously recognized (for a write-down to fair value less cost to sell). The loss or gain shall adjust only the carrying amount of a long-lived asset, whether classified as held for sale individually or as part of a disposal group.

(FASB, 2016, ASC ¶ 205-20-45-3)

In a period in which a component of an entity either has been disposed of or is classified as held for sale, the income statement of a business entity or statement of activities of a not-for-profit entity (NFP) for current and prior periods shall report the results of operations of the component, including any gain or loss recognized in accordance with paragraphs 360-10-35-40 and 360-10-40-5, in discontinued operations. The results of operations of a component classified as held for sale shall be reported in discontinued operations in the period(s) in which they occur. The results of discontinued operations, less applicable income taxes (benefit), shall be reported as a separate component of income before extraordinary items (if applicable). For example, the results of discontinued operations may be reported in the income statement of a business entity as follows.

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A gain or loss recognized on the disposal shall be disclosed either on the face of the income statement or in the notes to financial statements (see paragraph 205-20-50-1(b)).

(FASB, 2016, ASC ¶ 205-20-45-1)

The results of operations of a  component of an entity  that either has been disposed of or is classified as held for sale under the requirements of paragraph  360-10-45-9 , shall be reported in discontinued operations in accordance with paragraph  205-20-45-3 if both of the following conditions are met:

· a.  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.

· b.  The entity will not have any significant continuing involvement in the operations of the component after the disposal transaction.

(FASB, 2016, ASC ¶ 360-10-45-14)

A long-lived asset classified as held for sale shall be presented separately in the statement of financial position. The presentation requirements in paragraph  205-20-45-10  are also applicable to long-lived assets (disposal groups) within the scope of this Subtopic.

(FASB, 2016, ASC ¶ 205-20-45-10)

The assets and liabilities of a  disposal group  classified as held for sale shall be presented separately in the asset and liability sections, respectively, of the statement of financial position. Those assets and liabilities shall not be offset and presented as a single amount. The major classes of assets and liabilities classified as held for sale shall be separately disclosed either on the face of the statement of financial position or in the notes to financial statements (see paragraph 205-20-50-1(a)).

(FASB, 2016, ASC ¶ 360-10-45-9)

A long-lived asset (disposal group) to be sold shall be classified as held for sale in the period in which all of the following criteria are met:

· a.  Management, having the authority to approve the action, commits to a plan to sell the asset (disposal group).

· b.  The asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (disposal groups). (See Examples 5 through 7 [paragraphs  360-10-55-37 through 55-41 ], which illustrate when that criterion would be met.)

· c.  An active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated.

· d.  The sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale, within one year, except as permitted by paragraph  360-10-45-11 . (See Example 8 [paragraph  360-10-55-43 ], which illustrates when that criterion would be met.) The term  probable  refers to a future sale that is likely to occur.

· e.  The asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value.The price at which a long-lived asset (disposal group) is being marketed is indicative of whether the entity currently has the intent and ability to sell the asset (disposal group). A market price that is reasonable in relation to fair value indicates that the asset (disposal group) is available for immediate sale, whereas a market price in excess of fair value indicates that the asset (disposal group) is not available for immediate sale.

· f.  Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.