As Part of Their Normal Course of Business, Companies Sometimes

question 246

Essay

As part of their normal course of business, companies sometimes sell off entire divisions or segments.The accounting treatment for such sales is composed of two components and a reporting format.
Required:
a. Describe the accounting treatment and reporting format used for such sales.
b. Discuss why such sales are separated from other parts of the income statement.

---

Definitions:

Flatness

A geometric tolerance that describes how flat a surface must be within specified limits.

Tertiary Plane

A plane that is oriented to intersect or be parallel with the primary and secondary planes in a three-dimensional coordinate system.

Primary Datum

A reference point, line, or plane from which dimensions are measured in technical drawing or CAD modeling.

Secondary Datum

A reference point, line, or surface used in conjunction with primary datums to establish a part’s orientation or location for measurement and manufacturing.