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I thought that for Disc Ops (held for sale assets), we always show actual gains or losses (in this case losses during X2) as well as any impairment loss at a disposal date (none here). I’m assuming year end to be 12/31/X2. So this approach wound indicate I & II as correct answer; however, that is wrong and the right choice is II & III. Could anyone advise please?
On November 1, 20X2, Smith Co. contracted to dispose of an industry segment on February 28, 20X3. Throughout 20X2 the segment had operating losses. These losses were expected to continue until the segment’s disposition. If a loss is anticipated on final disposition, how much of the operating losses should be included in the loss on disposal reported in Smith’s 20X2 income statements?
I. Operating losses for the period January 1 to October 31, 20X2.
II. Operating losses for the period November 1 to December 31, 20X2.
III. Estimated operating losses for the period January 1 to February 28, 20X3.
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