When there is a disposal of a component of an entity, the statement of income should report both income from continuing operations and income (loss) from discontinued operations.

Question

Quizplus · Accepted Answer

According to accounting standards such as IFRS (International Financial Reporting Standards) and US GAAP (Generally Accepted Accounting Principles), when a component of an entity is disposed of or classified as held for sale, the income statement should separately report the results of continuing operations and the results (income or loss) from discontinued operations to provide a clearer picture of the entity's ongoing performance.

When There Is a Disposal of a Component of an Entity