M1 Flashcards
How are gains on sale of fixed asset reported on the IS?
Net amounts as a result of continued operations, not net of income taxes
What is the definition of comprehensive income?
Includes all changes in equity during a period except those resulting from owner investments and distribution to owners
As revenues and and expenses are reported using gross amounts, gains and losses are reported using
Net amounts
How are discontinued operations reported?
Separately from continued operations in the income statement, net of tax
What is included as a discontinued operation?
Component of an entity, a group of components of an entity, or a business or nonprofit activity
What items are reported within discontinued operations?
Impairment loss, gain or loss from actual operations, and a gain or loss on disposal in the period in which they occur
Results of discontinued operations will only be reported if
The component has been disposed of or is classified as held for sale
All related costs to a discontinued operation are recognized when and if
The obligation to others exists and it represents a major strategic shift that will have a major effect on an entity’s operations or financial results
How is a discontinued component measured?
Measured at lower if it’s carrying amount or fair value less costs to sell. Costs to sell are incremental direct costs to transaction a sale
How to present discontinued operations?
Results net of tax are reported as a separate component of income below income from continuing operations and a gain or loss on disposal is disclosed on either the face of the income statement or in the notes
Comprehensive income formula
Net income (continuing and discontinued operations) + other comprehensive income = comprehensive income
What items are included in other comprehensive income?
PUFI : pension adjustments, unrealized gains and losses on available for sale securities and hedges, foreign currency items, and instrument specific credit risk
How are other comprehensive income tax effects reported?
Can be reported either net of tax or before related tax effects, with one mount shown for the aggregate income tax expanse or benefit related to the total other comprehensive income items
