Does a business segment qualify as a discontinued$$ operation? Explain.

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Part $1$

A$.$

Discontinued operations treatment applies to a component of the$$ entity, which may or may not be a business segment. After a company has determined that a portion of a business is a component of an entity or a group of components of an$$ entity, the disposal must represent a strategic shift that has or will have a major effect on the operations and financial results of the entity. If all of these conditions are$$ met, then the disposal should be treated as a discontinued operation under both U$.$S$.$ GAAP and IFRS.

B$.$

Discontinued operations treatment applies to a component of the$$ entity, which may or may not be a business segment. After a company has determined that a portion of a business is a component of an entity or a group of components of an$$ entity, the disposal must represent a strategic shift that has or will have a major effect on the operations and financial results of the entity. If all of these conditions are$$ met, then the disposal should be treated as a discontinued operation under U$.$S$.$ GAAP.

C$.$

Discontinued operations treatment does not apply to a business segment.$$ Therefore, the disposal should not be treated as a discontinued operation under U$.$S$.$ GAAP.

D$.$

Discontinued operations treatment applies to a component of the$$ entity, which must be a business segment. The disposal must represent a strategic shift that has or will have a major effect on the operations and financial results of the entity. If all of these conditions are$$ met, then the disposal should be treated as a discontinued operation under both U$.$S$.$ GAAP and IFRS.