Assume that in February 2011 a potential buyer of another of the domestic noncore business units insisted
Question:
Assume that in February 2011 a potential buyer of another of the domestic noncore business units insisted on a site assessment prior to signing a purchase commitment. The assessment’s purpose was to determine whether the site was environmentally impaired.
Unfortunately for Corrpro, trace amounts of a suspected carcinogen were discovered, causing the buyer to terminate the purchase. The buyer is willing to reconsider its decision if the site is remediated. While the site can be remediated using existing technology, doing so will be costly enough to negate the purpose of the sale, which is to raise funds to reduce debt. Management believes that employing new remediation methods currently being tested will make this sale economically feasible and thus places the sale of this business unit on hold. Should Corrpro’s 2011 financial statements include this division in Assets and liabilities held for sale? LO.1
Step by Step Answer:
Financial Reporting And Analysis
ISBN: 9780078110863
5th Edition
Authors: Lawrence Revsine, Daniel Collins