Definition: Under international financial reporting standards, a discontinued operation is a component of an entity that either has been disposed of already, or which is held for sale. It also falls into one of the following three categories:
- Separate business. It is a separate and major line of an entity's business, or comprises a geographical area of operations.
- Disposal plan. It is part of a plan to dispose of a separate and major line of an entity's business, or a geographical area of operations.
- Resale acquisition. It is a subsidiary that the entity originally acquired exclusively to resell.