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Presentation of Financial Statements, Discontinued Operations, ASC 205

Presentation of Financial Statements

Discontinued Operations

SFAS 144, August 2001
“Accounting for the Impairment or Disposal of Long-Lived Assets”

EITF 03-13, 2003
“Applying the Conditions in Paragraph 42 of FASB Statement No. 144 in Determining Whether to Report Discontinued Operations”

EITF 87-24, 1987
“Allocation of Interest to Discontinued Operations”

The results of operations of (A) or (B) are
–> “reported in discontinued operations”
–> if both (1) and (2) are satisfied

(A) An entity’s component that has been “disposed of”
(B) An entity’s component that is “held for sale”

(1) Operations and cash flows are eliminated from ongoing operation
(2) The entity does not have significant “continuing involvement”

The results of discontinued operations are
–> reported as a “separate component of income”
–> “before” extraordinary items

 Recognized gain or loss “on disposal” is
–> disclosed either (C) or (D)

(C) on the face of income statement
(D) in the notes to financial statements


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Presentation of Financial Statements, ASC 205

Presentation of Financial Statements

Financial Statements
1. Balance Sheet –> Topic 210
2. Income Statement –> Topic 215
3. Statement of Cash Flows –> Topic 230
4. Statement of Shareholder Equity –> Topic 215
5. Notes to Financial Statements –> Topic 235

Securities and Exchange Commission (SEC) Rules

Regulation S-X
–> 17 CFR Part 210

Code of Federal Regulations (CFR)

Title 17: Commodity and Securities Exchanges
Part 210: Form and content of and requirements for financial statements

General Instructions as to Financial Statements

Rule 3-01: Consolidated balance sheets
Rule 3-02
: Consolidated statements of income and changes in financial positions
Rule 3-03
: Instructions to income statement requirements
Rule 3-04
: Changes in stockholders’ equity and noncontrolling interests

Rules of General Application

Rule 4-01: Form, order, and terminology
Rule 4-02: Items not material
Rule 4-03: Inapplicable captions and omission of unrequired or inapplicable financial statements
Rule 4-04: Omission of substantially identical notes
Rule 4-08: General notes to financial statements

Rule 5-01: Application of rules 5-01 to 5-04
Rule 5-02: Balance sheets
Rule 5-03: Income statements

Rule 10-01: Interim financial statements

SEC Forms

Topic 1: Financial Statements
Topic 2: Business Combinations
Topic 3: Senior Securities
Topic 4: Equity Accounts
Topic 5: Miscellaneous Accounting
Topic 6: Interpretations of Accounting Series Releases and Financial Reporting Releases
Topic 7: Real Estate Companies
Topic 8: Retail Companies
Topic 9: Finance Companies
Topic 10: Utility Companies
Topic 11: Miscellaneous Disclosure
Topic 12: Oil and Gas Producing Activities
Topic 13: Revenue Recognition
Topic 14: Share-Based Payment


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