Читать книгу Wiley GAAP: Financial Statement Disclosure Manual - Joanne M. Flood - Страница 22

Today's Telecommunications has decided to close its pager division, which is a component of the reporting entity. This represents a strategic shift to focus on other divisions of the business. Today's Telecommunications has committed to a plan to sell the assets and liabilities of the division and has properly reclassified the division as held‐for‐sale at that date. The following conditions apply:

 The division has incurred $1,750 in losses from operations from the beginning of the year to the date it was reclassified as held‐for‐sale.

 The fair value of the assets and liabilities of the division are $10,775.

 Brokers’ commissions and other costs to sell are estimated to be $1,650.

 The carrying value of the assets and liabilities of the division is $12,525 before the adjustments (depreciation, amortization, adjustment of valuation accounts, and similar periodic adjustments) are made.

 The adjustments reduce the carrying value of the assets and liabilities by $125.

 Losses from operations of the division from the date it is classified as held‐for‐sale to the end of the fiscal year are $580. (This loss does not include the GAAP adjustments noted above.)

 Anticipated future losses from operations of the division from the end of this fiscal year to the expected sales date are $1,999.

 The tax rate is 40%.

The income statement presentation of discontinued operations would be:

Discontinued operations (Note X)
Loss from operations of discontinued division, net of tax of $982	$1,473
Loss on disposal of discontinued division, net of tax of $1,310	1,965
Loss on discontinued operations	$3,438

The loss from operations of the discontinued pager division is the sum of the $1,750 loss incurred prior to the date the assets and liabilities were classified as held‐for‐sale, plus the $125 adjustments that were recorded, plus the $580 loss incurred from the date the division was classified as held‐for‐sale to the end of the fiscal year. The sum ($2,455) less the tax effects of $982 ($2,455 × 40%) is the loss from operations of $1,473.

The loss on disposal is the difference between the carrying value of the division and its fair value less costs to sell. The carrying value of the division is $12,400 ($12,525 less the adjustments of $125). The fair value of the division less costs to sell is $9,125 ($10,775 fair value less costs to sell of $1,650). The difference of $3,275 less the tax effects of $1,310 ($3,275 × 40%) is the loss on disposal of $1,965. The anticipated future losses from operations of the division will be reported in discontinued operations in the future period in which they occur. They are not included in the loss on disposal in the current fiscal year.