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A component is defined in ASC 205-20-20.

Definition from ASC 205-20-20

Component of an entity: A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. A component of an entity may be a reportable segment or an operating segment, a reporting unit, a subsidiary, or an asset group.

We do not believe that a component can be at a lower level than an asset group because, in order to be a component, the cash flows must be clearly distinguishable from the rest of the reporting entity.
For a component to qualify as a discontinued operation at the balance sheet date, it must meet the criteria in ASC 205-20-45-1B which states the component must either be disposed of (e.g., through sale, abandonment, or spin-off), or meet the held-for-sale criteria of ASC 205-20-45-1E. It must also represent a strategic shift that has (or will have) a major effect on the reporting entity’s financial results.
Long-lived assets may be disposed of individually or as part of a disposal group. The guidance defines a disposal group.

Definition from ASC 205-20-20

Disposal group: A disposal group for a long-lived asset or assets to be disposed of by sale or otherwise represents assets to be disposed of together as a group in a single transaction and liabilities directly associated with those assets that will be transferred in the transaction. A disposal group may include a discontinued operation along with other assets and liabilities that are not part of the discontinued operation.

Question FSP 27-1 addresses whether an entity can consider an operation a component when the entity sells the operation but retains certain assets.
Question FSP 27-1
Can a reporting entity that sells an operation but retains certain assets associated with the operation (e.g., working capital or a facility) consider the operation a component of the reporting entity?
PwC response
It depends. Although the retained assets would not be part of the disposal group, the operations and cash flows associated with the assets to be sold may still constitute a component of a reporting entity as defined in ASC 205-20-20. In that situation, the results of operations of the component would be classified as discontinued operations provided the conditions of ASC 205-20 are met.

A reporting entity’s assessment of whether a component qualifies for discontinued operations reporting should occur when the component initially meets the criteria to be classified as held for sale. For abandonments, spin-offs, and exchanges, the assessment should take place when the component is disposed of. If a reporting entity has a disposal strategy that involves the “run-off” of operations (e.g., the reporting entity will cease accepting new business but will continue to provide services under existing contracts until they expire or terminate), discontinued operations should not be reported until substantially all operations, including run-off operations, cease.
A disposal group should be classified as held for sale if, at the balance sheets date, the criteria in ASC 360-10-45-9 are met. Changes in circumstances that occur after the balance sheet date, but prior to issuance of the financial statements, should not be considered in evaluating whether the disposal group would be classified as held for sale at the balance sheet date.

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