Income From Discontinued Operations Example

1 armadillo industries plans to cancel one of its pressurized container products due to a lack of sales.

Income from discontinued operations example. Company c has income from continuing operations of usd 700 million. Income taxes 10 500 000 income from continuing operations. Below is the sample of how you should show operations that are discontinued in the income statement. If this were a corporation income tax expenses would be part of the income statement and the gain on discontinued operations would be reduced by the income tax expense associated with the gain.

Discontinued operations are presented both under us gaap and ifrs. Income from continuing operations before income taxes. Loss from operations of discontinued business component 12 000 000 income tax benefit. Below is an example of a single step income statement containing discontinued operations.

Present net income for the period for the company. Its book value was usd 100 million. The product is part of a larger product group for which cash flows are tracked. If you show a loss your total taxes payable will decrease.

In this example add 40 000 and 35 000 to get 75 000 in total income from discontinued operations net of taxes. Loss on discontinued. For example if the loss from discontinued operations is 100 000 and your tax rate is 30 percent the applicable tax benefit is 30 000 100 000 x 0 30. Add together the income from discontinued operations net of taxes and the gain on sale net of taxes to calculate the total income from discontinued operations net of taxes.

Therefore the after tax loss from discontinued operations is 70 000 100 000 30 000. If you have a profit from discontinued operations your taxes payable will increase. The segment earned revenue of usd 200 million and incurred costs of usd 150 million. The following are examples of the accounting for discontinued operations.