【正文】 g a i n s : I n t e r e s t i n c o m e 6 2 , 1 8 7$ G a i n 2 4 , 6 0 0 8 6 , 7 8 7 O t h e r e x p e n s e s : I n t e r e s t 2 7 , 0 0 0$ L o s s 9 , 0 0 0 ( 3 6 , 0 0 0 ) I n c o m e b e f o r e t a x e s 1 9 0 , 8 8 7 I n c o m e t a x e s 6 2 , 5 0 0 N e t i n c o m e 1 2 8 , 3 8 7$ { Taxes Ine Statement (MultipleStep) Chapter 347 Extraordinary gains and losses and discontinued operations are . . . 1. Reported separately on the ine statement. 2. Shown of any related taxes. Other Items Chapter 348 1. Ine from continuing operations 2. Ine (loss) from the operations of a discontinued ponent 3. Gain (loss) from the disposal of a discontinued ponent 4. Extraordinary items 5. Any prior period adjustments 6. Any items of other prehensive ine Ine tax expense is matched against the following: Ine Tax Expense Chapter 349 Interperiod tax allocation involves allocating a corporation’s ine tax obligation as an expense to various accounting periods because of temporary (timing) differences between its taxable ine and pretax financial ine. Ine Tax Expense Chapter 350 Intraperiod tax allocation involves allocating a corporation’s total ine tax expense for a period to the various ponents of its ine, retained earnings, and other prehensive ine. Ine Tax Expense Chapter 351 An extraordinary item is an event or transaction that is both unusual in nature and infrequent in occurrence. Unusual naturethe underlying event or transaction possesses a high degree of abnormality and is of a type clearly unrelated to, or only incidentally related to, the ordinary and typical activities of the pany. Infrequency of occurrencethe underlying event or transaction is of a type that is not reasonably expected to recur in the foreseeable future. Extraordinary Items Chapter 352 Unusual? No Report Gain (Loss) As Ine from Continuing Operation (Other Items section) Infrequent? No or Event Extraordinary Items Chapter 353 Event Unusual? No Report Gain (Loss) As Infrequent? No or Yes Yes and Extraordinary Item Extraordinary Items Chapter 354 ? Specific extraordinary items identified in the pronouncement ? The direct result of a major casualty (such as an earthquake). ? An expropriation. ? A prohibition under a newly enacted law or regulation that clearly meets both criteria. Extraordinary Items Chapter 355 1. The writedown or writeoff of receivables, inventories, equipment leased to others, or intangible assets. 2. Gains or losses from exchanges or transactions of foreign currency. 3. Gains or losses from the disposals of a business ponent. Events that the APB Opinion No. 30 identified as not qualifying as extraordinary: Continued Extraordinary Items Chapter 356 4. Other gains or losses from the sale or abandonment of property, plant, or equipment. 5. The effects of a strike. 6. The adjustment of accruals on longterm contracts. 7. The effect of a terrorist attack. Events that the APB Opinion No. 30 identified as not qualifying as extraordinary: Extraordinary Items Chapter 357 One other item is required to be reported as an extraordinary item. As prescribed by FASB Statement No. 141, when a pany purchases another pany and pays less than the fair value of the other pany, it reports the difference as an extraordinary gain. Extraordinary Items Chapter 358 During 19X8, Apex Co. experienced a loss of $75,000 due to an earthquake at one of its manufacturing plants in Nashville. This was considered an extraordinary item. The pany reported ine from continuing operations of $128,387. All gains and losses are subject to a 30% tax rate. How would this item appear on the 19X8 ine statement? Extraordinary Items Example Chapter 359 E x t r a or di na r y Los s ( 7 5 , 0 0 0 )$ Le s s : Ta x B e ne f i t s ( $ 7 5 , 0 0 0 3 0 % ) 2 2 , 5 0 0 N e t Los s ( 5 2 , 5 0 0 )$ Extraordinary Items Example Chapter 360 E x t r a or di na r y Los s ( 7 5 , 0 0 0 )$ Le s s : Ta x B e ne f i t s ( $ 7 5 , 0 0 0 3 0 % ) 2 2 , 5 0 0 N e t Los s ( 5 2 , 5 0 0 )$ I n c o m e b e f o r e e x t r a o r d i n a r y i t e m 1 2 8 , 3 8 7$ E x t r a o r d i n a r y L o s s : E a r t h q u a k e l o s s ( n e t o f t a x b e n e f i t o f $ 2 2 , 5 0 0 ) ( 5 2 , 5 0 0 ) N e t i n c o m e 7 5 , 8 8 7$ Ine Statement Presentation: Extraordinary Items Example Chapter 361 ? Some events are unusual or infrequent, but not both. For example: ? restructuring charges. ? gain or loss from the sale of assets. I wonder how I should report these items. Reporting Unusual or Infrequent Items Chapter 362 I wonder how I should report these items. Psst! Why don’t you try reporting them in Ine from Operations? Reporting Unusual or Infrequent Items Chapter 363 A pany may decide to “discontinue” some of its operations and sell a ponent of these operations. What is a ponent? Discontinued Operations Chapter 364 A ponent of a pany involves operations and cash flows that can be clearly distinguished, operationally and for financial purposes, from the rest of the pany. A ponent may be a subsidiary, an operating segment or an asset group. Discontinued Operations Chapter 365 If a ponent of an entity has either been disposed of or classified as held for sale,we report the results of its operations separately in discontinued operations if two conditions are met: 1. The operations and cash flows of the ponent have been(or will be) eliminated from the ongoing opera