Chapter 2ASC 205 PRESENTATION OF FINANCIAL STATEMENTS

  1. PERSPECTIVE AND ISSUES
    1. Subtopics
    2. Scope Exceptions
    3. Technical Alert
  2. DEFINITIONS OF TERMS
  3. CONCEPTS, RULES, AND EXAMPLES
    1. ASC 205-10, Overall
    2. ASC 205-20, Discontinued Operations
    3. ASC 205-30, Liquidation Basis of Accounting

PERSPECTIVE AND ISSUES

Subtopics

ASC 205, Presentation of Financial Statements, is divided into two subtopics:

  • ASC 205-10, Overall, which emphasizes the value of comparative financial statements, and
  • ASC 205-20, Discontinued Operations, which provides guidance
    • On reporting the results of operations when a component of an entity has been disposed of or is classified as held for sale and
    • On the allocation of interest and overhead of discontinued operations
  • ASC 205-30, Liquidation Basis of Accounting, which is expanded upon in the technical alert below.

Scope Exceptions

ASC 205-30 does not apply to:

  • Companies registered under the Investment Company Act of 1945 because legally they are not permitted to change the way they measure their net assets and
  • Limited-life entities that are following liquidation plans established at their inception.

Technical Alert

In April 2014, the FASB issued ASU 2014-08. Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The ASU changes the criteria for determining which disposals can be presented as discontinued operations. The ASU also modifies related disclosure requirements.

Scope. Please note that this ASU applies to all ...

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