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Excerpt from ASC 205-20-45-10
In the period(s) that a discontinued operation is classified as held for sale and for all prior periods presented, the assets and liabilities of the discontinued operation shall be presented separately in the asset and liability sections, respectively, of the statement of financial position.
Amount |
|
Income from continuing operations, net
|
$xxx,xxx
|
Discontinued operations:
|
|
Loss from operations of discontinued Component X
|
|
(including loss on disposal of $xxx,xxx) |
(xxx,xxx)
|
Income tax benefit |
xxx,xxx
|
Loss on discontinued operations |
(xxx,xxx)
|
Net income
|
$xxx,xxx
|
For any discontinued operation initially classified as held for sale in the current period, an entity shall either present on the face of the statement of financial position or disclose in the notes to financial statements (see paragraph 205-20-50-5B(e)) the major classes of assets and liabilities of the discontinued operation classified as held for sale for all periods presented in the statement of financial position. Any loss recognized on a discontinued operation classified as held for sale in accordance with paragraphs 205-20-45-3B through 45-3C shall not be allocated to the major classes of assets and liabilities of the discontinued operation.
Net assets of discontinued operation |
||
Divided by |
Less: Debt required to be paid off as part of disposal transaction |
|
Net assets of consolidated reporting entity |
||
Plus: Consolidated debt |
||
Less: Debt of the discontinued operation that will be assumed by buyer |
||
Less: Debt required to be paid off as part of the disposal transaction |
||
Less: Debt that is directly attributed to other operations |
Excerpt from ASC 205-20-45-8
This allocation assumes a uniform ratio of consolidated debt to equity for all operations (unless the assets to be sold are atypical — for example, a finance company — in which case a normal debt to equity ratio for that type of business may be used). If allocation based on net assets would not provide meaningful results, then the reporting entity should allocate interest to the discontinued operations based on debt that can be identified as specifically attributed to those operations.
Interest on debt to be assumed by the buyer: $2,000 x 6% x 6 / 12 months |
$60 |
Interest on debt required to be repaid: $1,000 x 8% x 6 / 12 months |
40 |
$100 (A) |
Net assets of FSP Corp: |
$50,000 |
|
Plus: |
Consolidated debt |
15,000 |
Less: |
Debt to be assumed by the buyer |
(2,000) |
Debt required to be repaid from sale proceeds |
(1,000) |
|
Debt that is directly attributed to other operations of FSP Corp |
(8,000) |
|
$54,000 (C) |
Consolidated debt |
$15,000 |
Debt to be assumed by the buyer |
(2,000) |
Debt required to be repaid from sale proceeds |
(1,000) |
Debt that is directly attributed to other operations of FSP Corp |
(8,000) |
Debt not directly attributable to other operations of FSP Corp |
$4,000 (E) |
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