Which of the following is true regarding discontinued operations?
A)If a loss is expected on disposal, the estimated loss is recognized in the financial statements as of the measurement date.
B)If a loss is expected on disposal, the estimated loss is recognized in the financial statements as of the disposal date.
C)If a loss is expected on disposal, recognition is deferred until realization.
D)If a gain is expected on disposal, the estimated gain is recognized in the financial statements as of the measurement date.

Question

Quizplus · Accepted Answer

If a loss is expected on disposal, the estimated loss is recognized in the financial statements as of the measurement date. This is in accordance with the accounting standard ASC 205-20. The estimated loss is recognized as a separate component of income from continuing operations.

Which of the Following Is True Regarding Discontinued Operations