# ASC 205-20-05: Presentation of Financial Statements — Discontinued Operations — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

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## ASC 205-20-05: 05 Overview and Background

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##### [205-20-05-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-05-1)

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This Subtopic provides guidance on the presentation and disclosure requirements for discontinued operations. A discontinued operation may include a [component of an entity](https://asc.understandingaccounting.org/glossary/c/#component-of-an-entity "A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. A component of an entity may be a reportable segment or an operating segment, a reporting unit, a subsidiary, or an asset group.") or a group of components of an entity, or a [business](https://asc.understandingaccounting.org/glossary/b/#business "Paragraphs 805-10-55-3A805-10-55-4805-10-55-5805-10-55-6 and 805-10-55-8805-10-55-9 define what is considered a business.") or [nonprofit activity](https://asc.understandingaccounting.org/glossary/n/#nonprofit-activity "An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing benefits, other than goods or services at a profit or profit equivalent, as a fulfillment of an entity's purpose or mission (for example, goods or services to beneficiaries, customers, or members). As with a not-for-profit entity, a nonprofit activity possesses characteristics that distinguish it from a business or a for-profit business entity.").

##### [205-20-05-2](https://asc.understandingaccounting.org/asc/205/20/#205-20-05-2)

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The required disclosures about discontinued operations vary depending on the nature of the discontinued operation. For example, if a discontinued operation includes a component or group of components of an entity that is not an equity method investment, a more comprehensive set of disclosures about the discontinued operation is required. If the discontinued operation includes an equity method investment, or a business or nonprofit activity that is classified as held for sale on acquisition, a more limited set of disclosures is required (see the flowchart in paragraph [205-20-55-82](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-82) for an illustration).