11 - • Reported after continuing operations net of income...

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Continuing Operations Income from day-to-day normal business activities Includes: Revenues and operating expenses Gains and losses Income tax expense Can help predict future annual income Discontinued Operations Company sells a segment of the business Identifiable part of business Reported beneath income from continuing operations Net of income taxes Not considered in predictions of future earnings Extraordinary Items Gains and losses that are both infrequent and unusual Include losses from natural disasters and expropriation of assets by foreign governments Do NOT include gains or losses from lawsuits, restructuring or sale of plant assets
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Unformatted text preview: • Reported after continuing operations net of income taxes Cumulative Effect of Change in Accounting Method • Change from one accounting method to another FIFO to LIFO Straight-line depreciation to double-declining balance • Makes difficult to compare year-to-year statements • Reported in special section usually after extraordinary items Earnings per Share (EPS) Key measure of company’s success: Net Income - Preferred Dividends Average number of common shares outstanding Reported for each element of net income: Discontinued operations, extraordinary items, etc. Preferred dividends only subtracted for continuing operations and net income...
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This note was uploaded on 06/14/2011 for the course ACCOUNTING 23020 taught by Professor Na during the Spring '11 term at Kent State.

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