Accounting Dictionary

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Discontinued Operations

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.