Which of the following most likely would be considered a discontinued operation?
A) Production or marketing functions are shifted from one location to another.
B) A sporting goods manufacturer has a bicycle division that meets FASB's definition of a component of the entity and decides to outsource the manufacture of its bicycles.
C) The unprofitable brands of a beauty products component of an entity that manufactures and sells consumer products are discontinued.
D) An entity that is a franchiser in the quick-service restaurant business also operates company-owned restaurants that are unprofitable in a certain region and,as a result,the entity decides to exit both the quick-service business as well as the company-owned restaurants in that region.

Question

Quizplus · Accepted Answer

Discontinued operations refer to a significant part of a business that has been sold, abandoned, or otherwise disposed of. Choice D describes a scenario where an entity decides to exit an entire line of business (both the franchiser aspect and the company-owned restaurants in a certain region), which aligns with the concept of a discontinued operation. Choices A, B, and C involve restructuring or outsourcing parts of a business, or discontinuing unprofitable brands, but do not represent the complete discontinuation of a significant line of business.

Which of the Following Most Likely Would Be Considered a Discontinued