Reference no: EM133530879

Question: On December 1, 2022, SSI's board of directors approved the sale of the skateboard segment, as it had been underperforming for the past two years. A broker was hired that month to assist in carrying out this transaction and achieving the highest possible sales price for the assets of the segment. The skateboard segment currently has two interested buyers, and SSI expects that a deal will close by February 2023. The skateboard segment incurred a loss of $2,830,500 for the 2022 fiscal year. Of that amount, $2,250,000 was for the period up until the date the board approved the disposal of the segment, and the rest was incurred between December 1, 2022, and year end. Estimated costs to dispose of the segment are $300,000. The carrying value of current assets and all liabilities is equal to fair value. The fair value of the property, plant, and equipment of the segment is estimated to be $7,000,000, and the carrying value of property, plant, and equipment was $7,300,000 ($15,000,000 cost less $7,700,000 accumulated depreciation). Analyze this issue, explaining how the skateboard segment will be presented in the financial statements.