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FASB proposes amendments to discontinued operations

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02 Apr 2013

The US Financial Accounting Standards Board (FASB) has issued Proposed Accounting Standards Update (ASU) 'Presentation of Financial Statements (Topic 205): Reporting Discontinued Operations'. The proposal intends to improve financial reporting concerning discontinued operations and significantly converge the definition of discontinued operation with IFRS 5.

The proposed guidance is intended to address the FASB’s concerns that (1) “too many asset disposals that are recurring in nature qualify for being presented as discontinued operations, resulting in financial statements that are not decision-useful” and (2) “the current rules are difficult to apply and unnecessarily costly.”

In addition, the amendments will require entities to include "additional disclosures about discontinued operations and other disposals of individually material components . . . that do not qualify for discontinued operations presentations in the financial statements."

Comments are due by 30 August 2013.

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