Aside from estimating a net realizable value for existing account balances, management will need to consider: Determining a reasonable estimate of the costs and financial impact of the above items may not be feasible.If this is the case, adequate disclosure in the footnotes should be made.
In these instances, the prior period statements should not refer to a "liquidation basis." The question of whether amounts should be recorded at present value must be considered on a case-by-case basis.
Generally, an APB-30 discontinued operation approach uses gross amounts rather than present values.
When a liquidation basis is followed, the propriety of present values depends on the certainty with which amounts and timing can be predicted and the objectivity with which an appropriate rate of interest for a company in liquidation can be determined.
Corporate liquidations can vary considerably in length and complexity; this should be carefully considered in determining which basis of accounting is more appropriate in the circumstances.
Management may also be concerned about receiving a report from the company's independent accountants due to contractual compliance or shareholders' requirements.