1.1 Overview
In August 2001, the FASB issued Statement
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.
Further, 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.