6.5 Disclosures for Individually Significant Assets (Disposal Groups) That Are Not Discontinued Operations
Entities must disclose information about pretax profit or loss if a long-lived
asset (disposal group) includes an individually significant component that either
has been disposed of or is classified as held for sale and does not qualify for
discontinued-operations reporting. If an individually significant component includes
a noncontrolling interest, the pretax profit or loss attributable to the parent must
also be disclosed.
The term “individually significant” is not defined. For instance, it is unclear
how an entity should determine whether a disposal is major,
individually significant, or not significant. As with their
assessment of “strategic shift” and “major,” entities will need to
use judgment and should consider both quantitative and qualitative
factors related to the effect of the disposal on their balance
sheets, income statements, and statements of cash flows. Entities
should also recognize that the distinction between disposing of a
component that is “individually significant” and one that represents
a “strategic shift” that has a “major impact” on financial results
is likely to be subtle. Accordingly, such assessments may need to be
made in concert with, rather than independent of, one another.
Therefore, entities should also consider the judgments involved in
the assessment of the requirements for classifying discontinued
operations for individually significant disposal groups.
ASC 360-10
50-3A In addition to the
disclosures in paragraph 360-10-50-3, if a
long-lived asset (disposal group) includes an
individually significant component of an entity
that either has been disposed of or is classified
as held for sale (see paragraph 360-10-45-9) and
does not qualify for presentation and disclosure
as a discontinued operation (see Subtopic 205-20
on discontinued operations), a public business
entity and a not-for-profit entity that has
issued, or is a conduit bond obligor for,
securities that are traded, listed, or quoted on
an exchange or an over-the-counter market shall
disclose the information in (a). All other
entities shall disclose the information in (b).
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For a public business entity and a not-for-profit entity that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market, both of the following:
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The pretax profit or loss (or change in net assets for a not-for-profit entity) of the individually significant component of an entity for the period in which it is disposed of or is classified as held for sale and for all prior periods that are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity) calculated in accordance with paragraphs 205-20-45-6 through 45-9.
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If the individually significant component of an entity includes a noncontrolling interest, the pretax profit or loss (or change in net assets for a not-for-profit entity) attributable to the parent for the period in which it is disposed of or is classified as held for sale and for all prior periods that are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity).
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For all other entities, both of the following:
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The pretax profit or loss (or change in net assets for a not-for-profit entity) of the individually significant component of an entity for the period in which it is disposed of or is classified as held for sale calculated in accordance with paragraphs 205-20-45-6 through 45-9.
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If the individually significant component of an entity includes a noncontrolling interest, the pretax profit or loss (or change in net assets for a not-for-profit entity) attributable to the parent for the period in which it is disposed of or is classified as held for sale.
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