Assume a firm elects early adoption of ASU 2014–08 related to discontinued operations. The following disposal could qualify as a discontinued operation:
A. Disposal of a component of an entity that is similar in nature to other components but has operations and cash flows distinguishable from the rest of the entity.
B. Disposal of a component of an entity due to a major change in business strategy.
C. Disposal of a small component of an entity within the current business strategy.
D. Disposal of a component of an entity with distinguishable operations and cash flows from the rest of the entity.
Answer:B
A is incorrect because discontinued operations must represent a strategic shift or major operating impact. Similar operations do not qualify.
B is correct because discontinued operations must represent a strategic shift or major operating impact.
C is  incorrect because discontinued operations must represent a strategic shift or major operating impact. Small components with similar business strategies do not qualify.
D is incorrect because discontinued operations must represent a strategic shift or major operating impact. Similar operations do not qualify. The information does not allow to determine if the disposal resulted from a new strategy or if the component was a major part of the company.