Income statement

Question 1

When using a single step income how should discontinued operations be reported?

Answer 1

Discontinued operations should below income from continuing operations net of tax.

Revenues
(-) Expenses
(=) Income from continuing operations
(+/-) Discontinued operations, net of tax
(=) Net income

Question 2

What is the structure of a multiple step comprehensive income statement

Answer 2

Revenue
(-) COGS
(=) Gross Profit
(-)Operating expenses
(=) Operating income
(+/-) Gains/losses
(=) Income before income tax
(-) Income tax
(=) Income from continuing operations
(+/-) Discontinued operations
(=) Net income
(+/-) Other comprehensive income
(=) Comprehensive income

Question 3

How should Gains/losses from material transactions that are “infrequent in occurrence” and/or “unusual in nature” be presented in the income statement?

Answer 3

Separately as a component of income from continuing operations.