Lec9(horizonal anaylsis)pdf - MGMT 2300 Accounting for...

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Unformatted text preview: MGMT 2300 Accounting for Decision Making Lecture 9 Financial Statement Analysis Accounting for Decision Making 2008 Spring Income Statement The Income Statement is used as a predictor of future earnings. As such, the Financial Accounting Standards Board (FASB), requires certain components of income to be reported separately, as they are not expected to recur. Accounting for Decision Making 2008 Spring The following items must be reported separately. Accounting for Decision Making 2008 Spring Once a firm decides to discontinue a division , its operating results and the financial impact of the sale must be segregated from income that is expected to continue. Discontinued Operations Accounting for Decision Making 2008 Spring Example : Expected To Continue Not Expected To Continue Reporting Discontinued Operations Accounting for Decision Making 2008 Spring Results of Continuing Operations are presented in Before-Tax Dollars The Income Tax Expense on Income from Continuing Operations is presented separately Income from Continuing Operations, in after-tax dollars, is the amount that can be expected to recur. There are two income statement components for Discontinued Operations: Income from Operation of the Discontinued Segment is presented net of taxes....
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Lec9(horizonal anaylsis)pdf - MGMT 2300 Accounting for...

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