NEWS RELEASE 09/25/08
FASB Proposes Improvements to Reporting of a Discontinued Operation
Constituents asked to provide comment on FASB Staff Position FAS 144-d, Amending the Criteria for Reporting a Discontinued Operation
Norwalk, CT, September 25, 2008—The Financial Accounting Standards Board (FASB) today issued proposed FASB Staff Position (FSP) FAS 144-d, Amending the Criteria for Reporting a Discontinued Operation. The FSP is intended to improve the quality and consistency of financial reporting by defining a discontinued operation and establishing disclosure requirements for all components of an entity that have been disposed of or are classified as held for sale. Constituents have until January 23, 2009, to review and provide comment on the proposals contained in the document.
The proposed FSP would amend the definition of a discontinued operation as a component of an entity that is (a) an operating segment (as defined in FASB Statement No. 131, Disclosures about Segments of an Enterprise and Related Information) and either has been disposed of or is classified as held for sale or (b) a business (as that term is defined in FASB Statement No. 141 (revised 2007), Business Combinations) or a nonprofit activity that meets the criteria to be classified as held for sale on acquisition. It would thus establish when the income effects of a component of an entity would be reported in the discontinued operations section of the income statement under FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. The FSP also would amend the disclosure requirements of Statement 144 for all components of an entity that either have been disposed of or are classified as held for sale regardless of whether a component of an entity is reported in the income statement as a discontinued operation or in continuing operations.
In addition to providing feedback on the definition of a discontinued operation set forth in the FSP, respondents are asked to comment on the proposed disclosure requirements, including their potential effect on income tax expenses and benefits. They are also asked whether they agree with the disclosure exemptions for businesses or nonprofit activities that meet the criteria to be classified as held for sale on acquisition.
FSP FAS 144-d is available for review at www.fasb.org.
About the Financial Accounting Standards Board
Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information. For more information about the FASB, visit our website at www.fasb.org.
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