Goodwill is assigned to the reporting unit or units that benefit from the synergies arising from each business combination. Shipping and handling costs related to the movement of finished goods from manufacturing locations to our sales distribution centers are included in the line item cost of goods sold in our consolidated statements of income. Shipping and handling costs incurred to move finished goods from our sales distribution centers to customer locations are included in the line item selling, general and administrative expenses in our consolidated statements of income. During the years ended December 31, 2017, 2016 and 2015, the Company recorded shipping and handling costs of $1.1 billion, $2.0 billion and $2.5 billion, respectively, in the line item selling, general and administrative expenses. Our customers do not pay us separately for shipping and handling costs related to finished goods. Secondly, the discontinued operation is not allowed to have significant continued involvement with the parent company, which is significantly different from IFRS. Another difference is that equity method investments are not allowed to be classified as being held for sale.

Carla Tardi is a technical editor and digital content producer with 25+ years of experience at top-tier investment banks and money-management firms. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network.

Reporting of Discontinued Operations

An entity is required to disclose the impact of the change in accounting estimates on its income from continuing operations, net income of the current period. If the change in estimate is made in the ordinary course of accounting for items such as uncollectible accounts or inventory obsolescence, disclosure is not required unless the effect is material. If the change in estimate does not have a material effect in the period of change, but is expected to in future periods, any financial statements that include the period of change should disclose a description of the change in estimate. Unlike GAAP reporting requirements, IFRS rules permit equity method investments to be classified as held for sale. As with GAAP, discontinued operations are reported in a special section of the income statement.

In addition, our Company holds interests in certain VIEs, primarily bottling and container manufacturing operations, for which we were determined to be the primary beneficiary. Our Company’s investments, plus any loans and guarantees, related to these VIEs totaled $1 million and $203 million as of December 31, 2017 and 2016, respectively, representing our maximum exposures to loss. The assets and liabilities of VIEs for which we are the primary beneficiary were not significant to the Company’s consolidated financial statements. Discontinued operations are the results of operations of a component of an entity that is either being held for sale or which has already been disposed of. The designated results of operations must be reported as a discontinued operation within the financial statements if both of the conditions noted below are present. During the regular course of a company’s life, it will often undergo changes in its business structure, including the cancellation of product lines deemed obsolete or no longer profitable, the disposition of aged equipment, sales of various market segments, and shifts in their business model. All of the changes described above will lead to discontinuation, and therefore must be reported as discontinued operations on financial statements.

Avantax Sees $1.7 Billion in Newly Recruited Assets, Up 79%

Example FSP 27-1 addresses when the disposal of two components should be combined for purposes of determining whether they constitute a discontinued operation. The CPA Journal is a publication of the New York State Society of CPAs, and is internationally recognized as an outstanding, technical-refereed publication for accounting practitioners, educators, and other financial professionals all over the globe. Edited by CPAs for CPAs, it aims to provide accounting and other financial professionals with the information and analysis they need to succeed in today’s business environment. In these situations, management should work closely with its securities counsel and auditors and may need to discuss its approach with the SEC staff, stock exchanges, or other regulatory agencies about the measures to be taken given the facts and circumstances. “Generally, the Division of Corporation Finance will not issue comments asking a delinquent registrant to file separately all of its delinquent filings if the registrant files a comprehensive annual report on Form 10-K that includes all material information that would have been included in those filings. Voluntarily changes from one acceptable accounting principle to another on the basis that it is preferable. Separately disclose reconciling items by nature, on the basis of a quantitative threshold of 5%, for other items that do not fall within any specific category.

• Discontinued operations often still make a gain or a loss in the accounting period in which it decided to cease operations.
• An income statement is one of the three major financial statements that report a company’s financial performance over a specific accounting period.
• In financial statements which reflect both error corrections and reclassifications, clear and transparent disclosure about the nature of each should be included.
• The SEC staff expects registrants to disclose their accounting policy for allocating interest to a discontinued operation, which should include the method of allocation.
• For more information about Crowe LLP, its subsidiaries, and Crowe Global, please read our Disclosure.

Our consolidated net income includes our Company’s proportionate share of the net income or loss of these companies. Our judgment regarding the level of influence over each equity method investee includes considering key factors such as our ownership interest, representation on the board of directors, participation in policy-making decisions, other commercial arrangements and material intercompany transactions. In accounting, discontinued operations are listed separately from continuing operations on financial statements so that external users of the statements do not become confused and inappropriately evaluate the profitability of the company.

Best Practice Disclosures

As more and more unusual items are classified as part of income from continuing operations, the ability for managers to opportunistically classify items and smooth earnings will be reduced. The decision of what information is useful is left to the user of the financial statements.

If a https://intuit-payroll.org/s transaction has multiple element arrangements the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity’s treatment of any unearned or deferred revenue that arises from the transaction. During the year ended December 31, 2016, the Venezuelan government devalued its currency and changed its official and most preferential exchange rate, which should be used for purchases of certain essential goods, to 10 bolivars per U.S. dollar from 6.3.

What Are Discontinued Operations?

In nearly every industry segment, the percentage of Fasb Offers New Guidance For Reporting On Discontinued Operations reporting discontinued operations doubled after the passage of SFAS 144. The number of companies reporting discontinued operations jumped significantly, however, with the adoption of SFAS 144 in 2002, to 589—a 95% increase—and has remained at a higher level. Although the ratio of companies reporting gains versus losses has not changed significantly since 2002, the percentage of all companies reporting discontinued operations doubled to 12%.

Diluted net income per share is computed similarly to basic net income per share, except that it includes the potential dilution that could occur if dilutive securities were exercised. Approximately 47 million, 51 million and 27 million stock option awards were excluded from the computations of diluted net income per share in 2017, 2016 and 2015, respectively, because the awards would have been antidilutive for the years presented. CCH® Accounting Research Manager® delivers interpretive guidance and authoritative content needed to confidently make accounting, financial reporting and audit decisions. About Nareit Nareit serves as the worldwide representative voice for REITs and real estate companies with an interest in U.S. real estate. Nareit’s members are REITs and other real estate companies throughout the world that own, operate, and finance income-producing real estate, as well as those firms and individuals who advise, study, and service those businesses. Why Invest in REITs REITs historically have delivered competitive total returns, based on high, steady dividend income and long-term capital appreciation. Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns.