Component of an entity

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Question 1
a. What is a component of an entity?
b. What is at least one example provided in FASB ASC of a group of components of an entity?
Question 2a: Is the sale or disposition of business a reporting strategy shift for ZD Consulting Services?
Question 2b: Is the sale or disposition of business a reporting strategy shift for Hope Industries?
Question 2c: Is the sale or disposition of business a reporting strategy shift for AM Mining Operations?
Question 3: Is AM Mining Operations held for sale or use?
Question 4: Is AM Mining Operations part of discontinuing operations even though not sold?
Question 5: How are discontinuing operations to be reported on an income statement?
Question 6: How are discontinuing operations reported on a balance sheet?
Question 7: What should note to discontinuing operations contain?
Question 8: How should gains or losses on sale of assets not part of discontinued operations be reported?
Question 9: How should impairment losses on assets that are not part of discontinuing operations be
reported on the income statement?

Sample Solution

A component of an entity is defined in ASC 360-10-20 as follows: “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.”  According to the FASB ASC, a group of components of an entity can be defined as a combination of multiple parts that are logically related and operate together in order to produce goods or services. For example, according to section 360-10-35-11 through 15 of the FASB ASC states that entities should consider a group of components as one element when they are “functionally interdependent”. This could include assets such as land and buildings used by an organization for production purposes which would form part of one asset if it is not possible to use either the land or building separately (Fasb Asc., 2019).

Notwithstanding the strides chalked by the Ghanaian banking sector, banking penetration still leaves much to be desired. Bawumia (2010) publicised the unbanked population as 70% and Wampah (2014) disclosed the unbanked population ratio as exceeding 80% with banking operations largely urbanised. Strategising to rope in more of the unbanked populace is also challenged by the low financial literacy rate. The rather low permeation of banks to the rural areas implies a significant unexploited segment to mobilise deposits and augment the profitability of the system.

Ackah and Asiamah (2014) documented that the high cost of credit, high lending rate and low credit availability to the private sector have bedevilled the sector. Lending rate averaged 28.51% from 2005 to 2016 having attained the highest of 42.84% in August 2016 and lowest of 21.24% in March 2008. High interest rate spreads averaged 23.01% between 2009 and 2014 as compared to a sub-Saharan average of 8.57% in 2012 (Adoah, 2015; Garr & Kyereboah, 2013; Mansah & Abor, 2013; tradingeconomics.com).
Ghanaian banks are challenged with balancing risk management and growth. Lack of structures to ascertain veracity of identification and credit history of borrowers exposes the industry to fraud. The policy to gather detailed customer information upon opening of accounts has not sufficed in forestalling banking fraud. Boateng, Boateng and Acquah (2014) asserted annual loss to bank fraud run into millions of Ghana cedis.

Opportunities

The establishment of foreign-owned banks into Ghanaian banking with the prerequisite to bring into Ghana 60% of initial capital in foreign convertible currency creates the platform for injection of foreign capital to stimulate economic development (Tetteh, 2014). Foreign-owned banks form approximately 52% of the total number of banks as at September 2016.

Incorporating technology in service delivery removes tailbacks of accessing banking services and offers a plethora of media such as internet and mobile banking, real-time settlement and ATMs for banks to innovate products and services and expand customer-base (Domeher, Frimpong & Appiah, 2014). Kumar (2011) recommended that businesses with a goal to revamp customer confid

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