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April 4, 2013

FASB issues update on discontinued operations reporting standard

The US Financial Accounting Standards Board (FASB) has issued a standard update aimed at improving financial reporting about discontinued operations and intended to achieve greater convergence with IFRS.

FASB’s proposed Accounting Standards Update (ASU) ‘Presentation of Financial Statements (Topic 205): Reporting Discontinued Operations’ includes additional requirements to disclosure operations such as operating, investing and financing cash flows.

FASB chairman Leslie Seidman said investors are concerned that "too many" disposals of assets qualify for discontinued operations presentation, which makes current rules more "costly and difficult to apply".

"The Board is seeking stakeholder input on changes intended to capture only those disposals that represent major strategic shifts as discontinued operations and to provide enhanced disclosures about the financial effects of discontinued operations," she said.

The FASB affirmed in a statement the proposed guidance could also achieve greater convergence with IFRS 5.

The deadline for comment is 30 August.

Related link

Financial Accounting Standards Board

Proposed Accounting Standards Update (ASU) ‘Presentation of Financial Statements (Topic 205): Reporting Discontinued Operations’

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