Dupont Corp. recently discontinued operations on one of its four branches, the branch is now conducting a clearance sale. The fixed assets in the discontinued branch are now being offered for sale and a buyer has been identified. The sale can take place within a year. Despite all this, the management is insisting on presenting all the fixed assets, including those that belong to the disposal group as PPE as it would give an impression of large manufacturing capacity. They are not in favour of presenting any amount of revenues from discontinued operations as well. Explain to them why these assets are no longer PPE and should be separated as assets-held-for- sale and why income on discontinued operation should be separated from continuing operation.
Dupont Corp. recently discontinued operations on one of its four branches, the branch is now
conducting a clearance sale. The fixed assets in the discontinued branch are now being offered for
sale and a buyer has been identified. The sale can take place within a year.
Despite all this, the management is insisting on presenting all the fixed assets, including those that
belong to the disposal group as PPE as it would give an impression of large manufacturing
capacity. They are not in favour of presenting any amount of revenues from discontinued
operations as well.
Explain to them why these assets are no longer PPE and should be separated as assets-held-for-
sale and why income on discontinued operation should be separated from continuing operation.
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