Summer Term 2018
Individual Research Paper (Dynamic Divestures) Case Study Questions
Answers to all questions should be in your own words, with citation to ASC 205 and 360. No need to cite ASC 420.
- What is the rationale for sometimes reporting business units that are sold or will be sold as part of discontinued operations rather than as part of remaining continuing operations?
- Referring to the codification, what do we mean by a component of an entity or a group of components of an entity?
- Do Dynamics Inc. actions with respect to ZD Consulting, Hope Industries and AM Mining represent a “strategic shift?” Address each business separately.
- Should AM Mining be classified as held for sale or held for use?
- Should AM Mining be classified as part of discontinued operations even though it is not sold?
- How should discontinued operations be reported on a company’s income statement?
- How should discontinued operations be reported on a company’s balance sheet?
- What should the notes to the financial statements include for discontinued operations?
- How should the gain or loss on sale of property, plant and equipment be computed?
- How should impairment losses (if any) on property, plant and equipment held for use be computed? What part of this computation as detailed by the codification does not make sense?
- When should you test for impairment losses for assets held for use?
- How should you compute impairment losses for assets held for sale? How does it differ for assets held for use? Should there be a difference?
- How should gains or losses on the sale of long-term assets that are not part of discontinued operations be reported?
- How should impairment losses on long-term assets that are not part of discontinued operations be reported on the income statement?
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