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ASC 205-20-50-5B(c) requires reporting entities to present in the statement of cash flows or disclose in a footnote either (1) total operating and investing cash flows for discontinued operations, or (2) depreciation, amortization, capital expenditures, and significant noncash operating and investing activities related to discontinued operations.
While the guidance does not require presentation or disclosure of cash flow information from discontinued operations related to financing activities, a reporting entity is not precluded from presenting or disclosing such information. Similarly, we do not believe a reporting entity would be precluded from providing information about operating or investing activities for discontinued operations that is incremental to the requirements of ASC 205-20-50-5B(c) (e.g., line item detail). In both alternatives, the operating, investing, and financing activities totals for the reporting entity do not change by having discontinued operations.
If a reporting entity separately discloses cash flows pertaining to discontinued operations, it should identify the respective categories (operating, investing, and financing). Including all cash flows from discontinued operations separate from the continuing operation cash flows, without separating the amounts into their respective categories (e.g., reflecting the entire net change as part of operating cash flows), is unacceptable. Doing so violates the provisions of ASC 230-10-45-24, which states, in part, "A statement of cash flows for a period shall report net cash provided or used by operating, investing, and financing activities…."
Questions have arisen about the proper presentation of cash receipts from the sale of a discontinued operation when a reporting entity elects to separate its cash flows from discontinued operations from its cash flows from continuing operations. We believe it is acceptable to present the cash inflow as either continuing-investing or discontinued-investing as long as such presentation is applied consistently and is accompanied by transparent disclosure. However, we believe the more intuitive treatment is to classify such sales proceeds as discontinued-investing cash flows.
The cash and cash equivalents line item on the balance sheet may not include all of a reporting entity's cash and cash equivalents if the reporting entity has a discontinued operation (disposal group) with cash and cash equivalents included within the assets held for sale caption. In such cases (regardless of which alternative is used), the cash included in assets held for sale should be disclosed as a component of cash and equivalents in the statement of cash flows, similar to separately presented restricted cash.

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