Federal Accounting Standard Boards And The Statement Of A New Manufacturing Company

Words: 1382
Pages: 6


Pamela Jefferies
ACC 541
October 19, 2010
Christine Errico

Abstract Our company has acquired a new manufacturing company. The new company has certain components, which are different from the new parent company. First, it has two different pension plans, which our company will have to research and to learn how to report on our financial statement. Also they have two different segments, which our objective is to eliminate. Our first goal is to define the pension plans and other retirement benefit plans and how we are to report them on our financial statements. Our second goal is to define the steps to eliminate the two segments within the guidelines of the Federal Accounting Standard Boards and the
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SFAS 131 states a company must report separately information about an operating segment that meets the following thresholds: * Its stated revenue is 10% or more of the combined revenue of all reported operating segments (Security and exchange commission, n.d.). * Its stated profit or loss is 10% or more of the greater merged reported profit of all operating segments or combined reported loss of all operating segments (Security and exchange commission, n.d.). * Assets are 10% or more of the combined assets of all operating segments (Security and exchange commission, n.d.).
The segment facts should specify what component of the unit is adding to the complete business ending.
Before eliminating the two segments several factors need to be addressed. Under the Financial Accounting Standards Board (FASB), Accounting Standards Codifications (ASC) 205-20-45-1 to discontinue an operation segment both of the following has to be met: * The venture and cash flows will be removed as a consequence of the disposal operation * The segment will not have any major ongoing participation in the operations of the component after the disposal transaction (Financial Accounting Standards Board, n.d.).
If the following is met and the segment is disposed of we will be