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Project Update
FAS 144—Reporting Discontinued Operations—Joint Project of the IASB and FASB
Last Updated: November 18, 2009 (Updated sections are indicated with an asterisk *)
This project update summarizes the project activities and decisions of the IASB and the FASB (Boards). It was prepared by the staff and is for the information and convenience of their constituents. All decisions of the Boards are tentative, may change at future Board meetings, and do not change current accounting and reporting requirements. Decisions of the Boards become final only after extensive due process.
Project Objective
Due Process
*Decisions Reached at the Last Meeting
*Summary of Decisions Reached to Date
*Next Steps
*Board/Other Public Meeting Dates
Background Information
Contact Information
Project Objective
The objective of this project is to develop a converged definition of a discontinued operation with the IASB along with converged disclosure requirements for all components of an entity that have been (or will be) disposed of.
Due Process
On September 25, 2008, the FASB issued an Exposure Draft, Amending the Criteria for Reporting a Discontinued Operation, for a 120-day comment period. The comment period ended on January 23, 2009.
As part of this joint project, the IASB also issued an Exposure Draft, Discontinued Operations, which proposes amendments to IFRS 5 to parallel those proposed in the FASB Exposure Draft. The comment period ended on January 23, 2009.
*Decisions Reached at the Last Meeting(October 26, 2009)
The Boards discussed the definition of a discontinued operation. They directed the staff to analyze IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, to explore the option of adopting as the converged definition the definition of a discontinued operation in that standard. Additionally, the Boards directed the staff to analyze the disclosures required by IFRS 5 and Topic 205, Presentation of Financial Statements, of the FASB Accounting Standards Codification™ (originally issued as FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets) and develop a proposal for converged disclosures.
*Summary of Decisions Reached to Date
The Boards decided that discontinued operations should continue to be presented in a separate section on the face of an entity's financial statements.
*Next StepsThe staff will present the analysis of the definition of a discontinued operation in IFRS 5, Non-current Assets Held for Sale and Discontinued Operations and the disclosures required by IFRS 5 and Topic 205, Presentation of Financial Statements, of the FASB Accounting Standards Codification™ (originally issued as FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets) at a future meeting.
*Board/Other Public Meeting Dates
The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.
| *October 26, 2009 | Joint FASB and IASB Board Meeting—Alternatives for a definition of a discontinued operation |
| August 26, 2009 | FASB Board Meeting—Discussion of the user feedback received |
| July 21, 2009 | IASB Board Meeting—The way forward with the project |
| July 23, 2008 | Board Meeting—Board directed the staff to proceed to a draft of a proposed FSP |
| May 14, 2008 | Board Meeting—Decisions related to the definition of Discontinued Operations, required disclosures for all components of an entity that have been (or will be) disposed of, effective date and transition, and proposed FSP comment period |
| April 18, 2007 | Board Meeting—Agenda Decision |
| January 24, 2007 | Board Meeting—Financial Statement Presentation: Discontinued Operations |
Background Information
At its January 24, 2007 meeting on the financial statement presentation project, the Board agreed to revise the definition of a discontinued operation in FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. It also decided to require an entity to provide additional disclosures when reporting the disposal (or future disposal) of a component of the entity. At the January 25, 2007 IASB Board meeting, the IASB agreed to converge with the FASB’s revised definition of a discontinued operation.
During the deliberations leading to the revised definition, the Board asked the staff to research the amount of the staff’s and the Board’s time necessary to create a separate project for this issue, effectively removing it from the scope of the financial statement presentation project. In February 2007, the staff received six letters from constituents, including NAREIT, in support of the revised definition and asked the IASB and the FASB to issue the revised guidance on an accelerated basis. In April 2007, the FASB and IASB Boards agreed to address the guidance for reporting discontinued operations and any related disclosure issues separately from the financial statement presentation project.
Contact Information
Phil Hood
Project Manager
prhood@fasb.org