Company: PENG
Filing Date: 2025-01-08
Form Type: 10-Q
Source: 0001628280-25-000944
Chunk: 31

Company: Penguin Solutions, Inc.
Filing Date: 2025-01-08
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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,591 Gain on revalue of 19% Retained Interest in SMART Brazil (2)3,725 Pre-tax loss on divestiture of 81% interest in SMART Brazil163,924 Income tax provision26,580 Loss on divestiture of 81% interest in SMART Brazil$190,504 (1)The sale of an 81% interest in SMART Brazil resulted in the de-consolidation of SMART Brazil and, accordingly, the release of the related cumulative translation adjustment. Included in the basis calculation above is the balance of cumulative translation adjustment for SMART Brazil as of the closing. The release of the cumulative translation adjustment is included in net income (loss) from discontinued operations in the accompanying consolidated statement of operations.(2)In connection with the transaction, we revalued our 19% Retained Interest in SMART Brazil based on the implied value for 100% of SMART Brazil, adjusted for lack of control premium. As of November 29, 2024, the carrying value of our remaining 19% interest in SMART Brazil was $37.8 million and was included in other noncurrent assets in the accompanying consolidated balance sheets as a non-marketable equity investment.

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Recognition Periods: The loss from the divestiture of an 81% interest in SMART Brazil was recognized as follows:Three Months EndedDecember 1,2023Pre-tax loss on divestiture of 81% interest in SMART Brazil$10,888 Income tax provision (benefit)(1,984)Loss on divestiture of 81% interest in SMART Brazil$8,904 

Recently Issued Accounting StandardsIn November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosure (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this ASU require disclosure, in the notes to the financial statements, of specified information about certain costs and expenses, as well as a qualitative description of amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. This ASU also requires disclosure of the total amount of selling expenses and an entity’s definition of selling expenses. The amendments in this ASU are effective for us in 2028 for annual reporting and in 2029 for interim reporting, with early adoption permitted and may be applied prospectively or retrospectively. We do not expect ASU