1.1 Overview
In August 2001, the FASB issued Statement No. 144, which provided accounting and
reporting guidance on long-lived assets to be (1) held and used, (2) disposed of by sale, and (3) disposed of other than by sale. FASB Statement 144 also provided
accounting and reporting guidance on discontinued operations and broadened the
presentation to include more disposal transactions than previous guidance. The guidance in Statement 144 was subsequently codified into ASC 360-10 and ASC
205-20.
In April 2014, the FASB issued ASU
2014-08, which elevated the threshold for presenting a disposal
transaction as a discontinued operation. The FASB issued this ASU partly in response
to stakeholder feedback that “under current guidance too many disposals of assets
qualify for discontinued operations presentation, resulting in financial statements
that are less decision useful for users and higher costs for preparers.” Under the
revised guidance, an entity presents a disposal as a discontinued operation if it
“represents a strategic shift that has (or will have) a major effect on an entity’s
operations and financial results” or is “a business or nonprofit activity that, on
acquisition, meets the criteria . . . to be classified as held for sale.” The
guidance in ASU 2014-08 replaced the previous guidance in ASC 205-20 on reporting
discontinued operations.