First Class Discontinued Operations Income Statement

The earnings and the charges are mainly focused on the.

Discontinued operations income statement. A companys income statement summarizes the revenues expenses and profits for an accounting period. The sale originated in 2005 and we can expect that the impact from discontinued operations on profitability will be lower than in earlier years. Others have criticized the limited information about discontinued operations because existing disclosures are primarily focused on the income statement.

APB 30 required that discontinued operations be reported as a separate line item on the income statement net of tax effects but not as an extraordinary item. In this video I solve 2 problems regarding discontinued operations and how they are prepared on the Income Statement. Discontinued operations are the results of operations of a component of an entity that is either being held for sale or which has already been disposed of.

Presenting Discontinued Operations in the Income Statement The results of the operations of the discontinued operations must be reported in a separate section in the income statement after the net. The income statement amounts are generally based on the historical amounts at the time of the original transaction. In 2002 FASB adopted SFAS 144 which greatly expanded the scope of transactions that might qualify for.

The designated results of operations must be reported as a discontinued operation within the financial statements if both of the following conditions are present. It represents the after tax gain or loss on sale of a segment of business and the after tax effect of the operations of the discontinued segment for the period. A schedule depicting whether the business entity is running profitably or not is described as an income statement.

Disclose the results from discontinued operations on the income statement or in accompanying notes. It is apparent from the income statements of 2006 2007 and 2008 that the values reported under Loss from discontinued operations have diminished significantly. The results of discontinued operations are presented as a single amount on the face of income statement including the after-tax gain or loss of discontinued operations as well as the after-tax profit or loss recognized either on quantification to fair value minus the costs to sell or.

In financial accounting discontinued operations refer to parts of a companys core business or product line that have been divested or shut down and. Changes in the fair value of marketable securities are an exception To illustrate assume that XXL Companys office and warehouse building was constructed 20 years ago at a cost of 750000 and was estimated to have a useful.