When assets and income from operations that a firm has decided to discontinue (and dispose of or abandon), separating the two income components allows users to form better predictions of
A)past earnings.
B)current earnings.
C)future earnings.
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

Separating the income components of discontinued operations can help users form better predictions of future earnings. By removing the impact of discontinued operations, users can better understand the ongoing earnings potential of the company, which can help with forecasting future earnings. Separating the income components is less useful for predicting past earnings or current earnings, as those periods have already passed or are currently being reported.

When Assets and Income from Operations That a Firm Has