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Flashcards in Discontinued Operations Deck (5)
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Relocation of employees

measured at FV when the liability is incurred


Criteria for discontinued operations:

1. management commits to a plan of disposal
2. assets are available for sale
3. active program to locate a buyer has been initiated
4. sale is probable
5. asset is actively marketed for sale at a fair price
6. unlikely that the disposal plan will significantly change


One time termination benefits

If employees are required to provide services beyond the minimum retention period - spread the expense over the period services are provided

Otherwise, the entire liability is recognized when the plan is communicated to employees


Restructuring in business operations

*sale or termination of line of business
*closure of business activities in particular location
* relocation of business activities
* changes in management structure
* reorganizations that affect the nature and focus of operations


Computation of Gain/Loss on Discontinued Operations

Add gain/loss on discontinued operations and gain/loss on disposal

assets valued at nrv