When an entity reports on a sale of a component of the business
A)any income or loss from operations of the component should be reported in the income from continuing operations section, but any gain or loss on the sale of the component should be presented below the income from continuing operations section
B)current operating income or loss of the component and any gain or loss on sale of the component should be presented in a separate section of the income statement
C)any gain or loss on the sale should always be presented in the extraordinary gain or loss section of the income statement
D)all information related to the sold component should be reported solely in the footnotes accompanying the financial statements

Question

Quizplus · Accepted Answer

When an entity reports on the sale of a component of the business, both the current operating income or loss of the component and any gain or loss on the sale of the component should be presented in a separate section of the income statement. This approach provides clarity on the financial impact of the sale and its operations up to the point of sale.

When an Entity Reports on a Sale of a Component