How should the gain or loss that is considered infrequent but not unusual in nature be disclosed?
A)separately in the income statement immediately after income from continuing operations
B)on a net-of-tax basis in the income statement immediately after income from continuing operations
C)as an extraordinary item
D)separately in the income statement as a component of income from continuing operations

Question

Quizplus · Accepted Answer

According to GAAP, gains or losses that are considered infrequent but not unusual in nature should be disclosed separately in the income statement as a component of income from continuing operations. This is because they do not meet the criteria of an extraordinary item, which is reserved for events or transactions that are both infrequent and unusual. Additionally, they are not reported net-of-tax and should be disclosed gross.

How Should the Gain or Loss That Is Considered Infrequent