ACCTERMPAPER - Memo To: Kristi Hampton, Controller From:...

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Memo To: Kristi Hampton, Controller From: Matt Thurston, Chief Financial Officer Date: December 6, 2010 Subject: Research Results In response to your request to research specific topics using the new FASB codification database, the following information has been put together for your review. Discontinued operations , FAS 144 paragraph 43, is now found under new codification 205- 20-45. Under this new codification, the effect of discontinued operations is reported separately on the income statement after the section entitled “income from continuing operations” and before the section entitled “extraordinary items.” The results of operations associated with the component of an entity that has been disposed of or classified as held for sale during the current or prior periods, are to be reported under discontinued operations in the income statement of a business entity (or the statement of activities of a not-for-profit entity). As a result of any of these transactions, the operations and cash flows of this component will no longer be listed in the section entitled “ongoing operations.” Also, the entity will no longer have any significant continuing involvement in the operations of the component following a disposal transaction. Once this component is reported as either a gain or loss from operations of a discontinued component, along with the disposal of that particular component, then all these gains or losses must be calculated net of tax. Here is an example of an income statement of discontinued operation using a tax rate of 40 percent: Loss from operations of discontinued Component x, net of tax of $12,000 = $18,000
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This note was uploaded on 07/07/2011 for the course ACCT 311 taught by Professor Tichich during the Spring '09 term at Maryland.

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ACCTERMPAPER - Memo To: Kristi Hampton, Controller From:...

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