I. The case study for this codification exercise, Dynamic Divestures: A Codification Exercise on the Reporting of Discontinue Operations, is posted on Canvas
II. 15 pages (not including title and reference pages) and single space. Include pages numbers.
III. To complete this assignment:
1. Consider the facts presented for each company within the case
2. Consult the FASB Accounting Standards Codification (ASC) for guidance on answering the questions listed below
3. Include FASB ASC citations where relevant
4. Your answers to each questions should be in the format of an essay answer. In other words, merely stating a FASB ASC section or writing you answers as bullet points is not sufficient.
5. The total possible points for this assignment is 200 points. Below is the total points for each question is listed. The specific rubric for each question is posted on Canvas. Also, a maximum of 29 points is for writing style, organization, spelling, and grammar.
IV. Questions to be answered in this assignment:
1. (9 Points): Why report discontinued operations?
2. (9 Points):
a. What is a component of an entity?
b. What are a group of components of an entity?
3. (27 Points): For each of the entities below, is the sale or disposition of business reporting a strategy shift?
a. (9 Points): ZD Consulting Services
b. (9 Points: Hope Industries
c. (9 Points): AM Mining Operations
4. (9 Points): Is AM Mining Operations held for sale or use?
5. (9 Points): Is AM Mining Operations part of discontinuing operations even though not sold?
6. (9 Points): How are discontinuing operations to be reported on an income statement?
7. (9 Points): How are discontinuing operations reported on a balance sheet?
8. (9 Points): What should notes to discontinuing operations contain?
9. (9 Points): How should gain or loss on sale of PPE be computed?
10. (36 Points):
a. How should impairment losses on PPE held for use
be computed?
b. What does not make sense?
11. (9 Points): When test for impairment loss assets held for use?
12. (9 Points): How do you compute impairment losses assets held for sale?
13. (9 Points): How should gains or losses on sale of assets not part of discontinued operations be reported?
14. (9 Points): How should impairment losses on assets that are not part of discontinuing operations be reported on the income statement? If held and used?