If the disposal of a segment meets the criteria of a disposal of a segment,then:
A)the loss on disposal is an extraordinary item.
B)the loss on disposal is categorized as "other expense".
C)the results of operations of the segment will be reported in conjunction with the gain or loss on disposal.
D)the disposal qualifies as a change in entity,and prior years' statements presented on comparative purposes must be restated.
E)the effects of the disposal are shown as part of operations.

Question

Quizplus · Accepted Answer

When a segment meets the criteria of a disposal, the results of operations of the segment will be reported in conjunction with the gain or loss on disposal. This means that the gain or loss will be reflected in the income statement, but the segment's operating results will be shown separately in order to provide additional information to users. The other choices are not accurate because losses on disposal are generally not considered extraordinary items, are not categorized as other expense unless specifically noted, do not qualify as a change in entity unless the entire company is being sold or merged, and are not shown as part of normal operations.

If the Disposal of a Segment Meets the Criteria of a Disposal