Discontinuing Operations Case Study

Discontinuing Operations Case Study Case Study example
Undergraduate
Case Study
Finance & Accounting
Pages 3 (753 words)
Download 0
Name of Student Name of Professor Course Title March 12, 2012 Discontinuing Operations In accounting for discontinued operations, ASC requires that operating income from discontinued operations and any gains or losses from their sale be segregated in the income statement, since these activities will not contribute to future income and cash flows…

Introduction

ASC states that the separation must be possible physically and operationally and for financial reporting purposes. At the measurement date, the firm will accrue any estimated loss from operations during the “phase-out period, that is, from the measurement date of the disposal date, and any estimated loss on sale or disposal. However any gain on disposal can be reported only after disposal, that is when realized (Accounting Standards Codification. Implementation Guidance and Illustrations 1). At end of the year the income statement reporting of discontinued operations should reproduces the income statement and partial footnotes of the Pit Stop centers. The income statement should show the two components of the segment have been excluded from reported sales and income from continuing operations. This means that reported sales and earnings will be restated to exclude the discontinued segment. The disclosure note should also provide summary disclosure of the net assets and operating results of the discontinued segment. However, any gain or loss from the sale of a portion of a business segment must be reported pretax as separate component of income from continuing operations rather than as a discontinued operation. Firms are encouraged to disclose separately the affected assets and liabilities on the balance sheet. ...
Download paper
Not exactly what you need?

Related papers

Case Study on Operations
Entrepreneurship generally entails the process where individuals with high aptitude undertake to pioneer change thus producing, improving, and increasing wealth. Such individuals are usually discouraged and held back by the uncertainties and risks that are involved with pioneering change. In this case, insurance companies come in handy to bear the risks involved with pioneering change at a…
Case Study 1, Case Study 2
were never taken care of. Now it has been heard that Sweetco Inc is being sold off by its holding company to its senior management and a leading firm. Apart from this, another fact was also revealed that Sweetco received money from its holding company for its operational functions on the basis of loans. This is the reason why the CFO has asked for an extension in the credit terms to 60 days. The…
Case study Gary hart
12,000 incurred the first week Analysis of revenues Revenue per day: 75%*60*24=?1,080 Payment in cash per day: 50%*1,080=?540 Revenue per month: 1,080*24=?25,920 Revenue per quarter: 25,920*3=?77,760 50% of daily sales are credit sales payable four weeks later Assumptions 1. Gary purchases ingredients once every month. 2. Waiting staff salaries and social security costs are payable every month. a.…
case study
However, profit and loss account does not provide information about future. (1.b) Profit and Loss Account Review: When looking at the profit and loss account of the Modern Furniture of both years, there are some items that are worth considering for decision making. The gross profit has declined by 10.75% from 2011. The major reason is the increase in the inventory cost. The other important thing…
Case study
o 600,000 sterling pounds, adding this amount to the working capital of 180,000 pounds amounts to an initial cost of 780,000 pounds. The overheads have been adjusted from the previous 47,000 pounds to 30,000 pounds in a year. Question One b i) Pay back Year Cash flow ? (?000) Cum. CF ? (?000) 0 (600) (600) 1 147,000 (453) 2 157,000 (296) 3 157,000 (139) 4 187,000 48 5 187,000 23 3 years and (139/…
Case Study
What decisions does the firm face with continued growth? The company has to decide on how to expand the business but not to operate in their sub sites. The challenge in proceeding with this decision is the fact that finding new sand gravel sites in the new areas is hard because they are Scarce. The Company’s director Frank Wardlaw has found two sites at Celadon owned by the local council.…
Case Study
Wells Fargo must ensure that their upper level management pays close attention to the external environment with emphasis on governmental and legal changes to the industry standard. Wells Fargo has been in business since 1852. Their first office opened in San Francisco during the gold rush. The stage coach was used to transport gold and other valuables. Wells Fargo helped establish the Great…