If a company reports an extraordinary gain, EPS must be disclosed for both income from continuing operations and net income.

Question

Quizplus · Accepted Answer

This statement is true. When a company reports an extraordinary gain, it must disclose EPS for both income from continuing operations and net income in order to provide a complete picture of its earnings. EPS for income from continuing operations excludes the impact of any one-time gains or losses, while EPS for net income incorporates these items. Disclosing both figures allows investors to compare the company's ongoing profitability with its overall profitability, taking into account any extraordinary events that may have occurred.

If a Company Reports an Extraordinary Gain, EPS Must Be