Components Of An Entity Or Group Of Elements Of A Entity Essay

726 Words Apr 15th, 2016 3 Pages
Summary

The principal affected entities are the ones who either have a component that is disposed or is classified as held for sale, or entities that have businesses or nonprofit activity plans on acquisition classified as held for sale.
The amendments on the new update changed the requirements to report discontinued operations. Any disposal of an element from an entity or a group of elements from an entity are required to be stated in the discontinued operations side if the disposal represents a change that could have a major result on an entity’s processes and financial consequences when any of the following happens:
1. The element of an entity or group of elements of an entity can be categorized as held for sale.
2. The element of an entity or group of elements of an entity is sold on a sale.
3. The element of an entity or group of elements of an entity is disposed in something different than a sale (for instance, abandonment or in distribution to holders).
The amendments in the new ASU ask entities to report, for each period, all assets as well as liabilities of the disposals. This includes to state on the asset and liability sections a discontinued operations section in the balanced sheet. Moreover, those amendments also require additional disclosures of the discontinued operations, such as:
1. The types of line articles that form the pretax profit or loss of the discontinued operations for the periods in which the operations’ outcomes are stated on the net income…

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