Income Statement With Discontinued Operations

If there were adjustments for disposal related amounts previously reported for discontinued operations they should be classified separately within the discontinued operations section of the income statement in the current period.

Income statement with discontinued operations. 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. The amount shown on the income statement under discontinued operations is the profit or loss made during the current period from business lines or units that will not be a part of the company in the future. A company s income statement summarizes the revenues expenses and profits for an accounting period. Net income from discontinued operations.

A loss on discontinued operations would be reduced by the income tax savings associated with the loss see net of tax. Income and expenses related to discontinued operations can be found on line items on a company s income statement below continuing operations income and above net income. Below is a multiple step income statement containing discontinued. As per accounting regulations the continuing operations are required to be reported individually in the income statement other than discontinued operations.

Example of discontinued operations. Note that even in a single step format shown above the amount of the discontinued operations is separated out and added to the end of the income statement. Disclose the results from discontinued operations on the income statement or in accompanying notes. A discontinued operation is a separate major business division or geographical operation that the company has disposed of or is holding for sale.

Ifrs 5 non current assets held for sale and discontinued operations require entity to report any gains or losses from discontinued operations as a single post tax net of tax line item in the income statement after computation of profit from continuing operations. The discontinued operations refer to the operations of a business which have been abandoned sold or else wise disposed of. Discontinued operations are listed separately on the income statement because it s important that investors can clearly distinguish the profits and cash flows from continuing operations from those. Additional discontinued operations disclosure rules.

Income or loss from discontinued operations is a line item on an income statement of a company below income from continuing operations and before net income. Detailed disclosure of revenue expenses pre tax profit or loss and related income taxes is required either in the notes or in the statement of comprehensive income. Such presentation help users assess financial performance better.