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Finance & Accounting
Pages 3 (753 words)
Pit Stop Case Report Table of Contents Table of Contents 1 Introduction 2 Closure of the Pit Store 3 Recommendation 4 Conclusion 4 Works Cited 4 Introduction Auto World Inc had two divisions: the Auto Boyz retail centre and the pit shop service and tire center.
Though the company was expecting to generate cash flows from the restructuring of the company, it had to incur $52 million cost due to the termination of the operating leases or due to the closure of the pit shops. The report is an attempt to analyze that the closure of the operations should be classified as discontinued operation, and to establish which procedure should be undertaken by the company in that situation. Closure of the Pit Store Auto World had two different segments: the Auto Boyz centre and the pit stop centers. The company submits their financial statements as per the US GAAP method. They followed the requirements as mentioned in the Financial Accounting Standards Board (FASB) standards. As per the FASB statement number 131, the company discloses its financial reporting about different statements (FASB, “Summary of Statement no. 131”). It has been found in the financial statements of the company that the company’s net sales and operating earnings are mentioned segment-wise. As per the FASB standard 146, the company also meets the criteria and it has to reveal the costs associated with the retirement or disposal of assets (FASB, “NEWS RELEASE 07/30/02”). ...
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