Definition of Discontinued operations:
When a company stops business transactions. The portion that has been stopped must be accounted for on the companys financial statements.
In financial accounting, discontinued operations refer to parts of a company’s core business or product line that have been divested or shut down and that are reported separately from continuing operations on the income statement.
Discontinued operations are listed separately on the income statement because it's important that investors can clearly distinguish the profits and cash flows from continuing operations from those activities that have ceased. This distinction is especially useful when companies merge, as parsing out which assets are being divested or folded gives a clearer picture of how a company will make money in the future.
How to use Discontinued operations in a sentence?
- Discontinued operations are reported on the income statement separately from continuing operations.
- Discontinued operations is an accounting term that refers to parts of a company’s core business or product line that have been divested or shut down.
- When companies merge, understanding which assets are being divested can give a clearer picture of how a company will make money in the future.
Meaning of Discontinued operations & Discontinued operations Definition