For purposes of discontinued operations, the key elements in determining that a separate segment exists are
A)the component is a separate business and a separate legal entity.
B)the component is a separate legal entity and generates its own net cash flows.
C)the component is in a separate geographic region and can be sold.
D)the component is a separate business and generates its own cash flow.

Question

Quizplus · Accepted Answer

The key elements in determining that a separate segment exists for purposes of discontinued operations include that the component is a separate business and generates its own cash flow. While being a separate legal entity or having a presence in a separate geographic region can be factors in determining a separate segment, they are not the primary criteria. The focus is on whether the component is a distinct business unit that can be separately identified and evaluated.

For Purposes of Discontinued Operations, the Key Elements in Determining