Cash flows from discontinued operations included depreciation and amortization of $19 million, $30 million, and $36 million for the years ended December 31, 20X2 and December 26, 20X1 respectively, as well as capital expenditures of $9 million, $19 million, and $27 million for the years ended December 31, 20X2 and December 26, 20X1, respectively.
Example 2.8: Note—Discontinued Operation—Not a Strategic Shift
In fiscal year 20X7, we expanded into container shipping services as a new business sector to provide related transportation logistics services to customers in the United States and in Canada. We have signed cooperation agreements with ShipCo Canada to provide freight logistics services and container shipping services to them in the United States. To ensure effective and high‐quality services provided to our customers in the United States, we established a joint venture, LRB Shipping Center Corp., in the second quarter of fiscal 20X7 with a U.S. local freight forwarder, Meta Global Logistics Inc. The joint venture ended in December 20X7 and we continue to operate shipping business through our other subsidiaries. Since LRB Center's operating revenue was less than 1% of the Company's consolidated revenue and the termination did not constitute a strategic shift that would have a major effect on the Company's operations and financial results, the results of operations for LRB Center was not reported as discontinued operations in the financial statements.
Example 2.9: Basis of Presentation—Liquidation Basis of Accounting
As a result of poor performance and lack of new capital contributions, XYZ Company has determined that liquidation was imminent as of June 1, 20X1 and adopted the liquidation basis of accounting at that date. XYZ calculated the net asset balances as of June 1 and presented a statement of changes in net assets as of June 30. The company adjusted the beginning balance of net assets as of June 1, 20X1 when preparing its quarterly report. Assets have been measured and are presented at the amounts of cash proceeds that the Company expects to get from liquidation. The Company has presented its internally developed trade name and other intellectual property assets which were not previously recognized under generally accepted accounting principles (GAAP), but are recognized under the liquidation basis of accounting. The company has also accrued for costs it expects to incur during the liquidation process.
Example 2.10: Statement of Net Assets in Liquidation
XYZ Company Statement of Net Assets in Liquidation As of June 30, 20X1
| Assets | |
| Cash and cash equivalents at carrying value | $ 3,300 |
| Trade receivables, Net | 1,536 |
| Property, plant, and equipment, Net | 6,518 |
| Liquidation basis of accounting, Items previously not recognized | 818 |
| Total Assets | $12,172 |
| Liabilities | |
| Accounts payable | $216 |
| Taxes payable | 66 |
| Notes payable | 450 |
| Due to related parties | 348 |
| Estimated costs to liquidate |
|