ACC 311 ch 4 ppt


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Unformatted text preview: o t a l o t h e r I nc o m e b e f o r e t a x e s I nc o m e t a x e x pe ns e I ncome f rom cont inuing operat ions (2 1,0 0 0 ) (4 ,0 0 0 ) 7 9 ,0 0 0 2 4 ,0 0 0 5 5 ,0 0 0 Discont inued operat ions: Discontinued Operations Loss f rom operat ions, net of t ax 315 Loss on disposal, net of t ax 189 T ot al loss on discont inued operat ions I ncome bef ore ext raordinary it em Extraordinary Item Chapter 4-22 504 Ext raordinary loss, net of t ax 5 4 ,4 9 6 539 N et income $ 5 3 ,9 5 7 Reporting Irregular Items Reporting Irregular Items Unusual Gains and Losses Material items that are unusual or infrequent, but not both, should be reported in a separate section just above “Income from continuing operations before income taxes.” Examples can include: Write­downs of inventories Foreign exchange transaction gains and losses Restructuring charges FASB prohibits net­of­tax treatment for these items. Chapter 4-23 Reporting Irregular Items Reporting Irregular Items Changes in Accounting Principles A new principle, different from the one in use, is adopted. Retrospective adjustment Cumulative effect adjustment to beginning retained earnings of earliest period presented Approach preserves comparability Example: change from FIFO to LIFO Until 2005, cumulative effect of accounting principle changes was shown net­of­tax, below extraordinary items. Chapter 4-24 Reporting Irregular Items Reporting Irregular Items Changes in Estimate Accounted for in the period of change and future periods Not handled retrospectively Not considered errors or extraordinary items Examples include: Useful lives and salvage values of depreciable assets Allowance for uncollectible receivables Warranty expense Chapter 4-25 . Change in Estimate Example Change in Estimate Example Arcadia HS, purchased equipment fo...
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This note was uploaded on 02/01/2014 for the course ACC 311 taught by Professor Professorchandra during the Fall '13 term at SUNY Albany.

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