Two special items, discontinued operations and extraordinary items, must be disclosed separately on the income statement.

Question

Quizplus · Accepted Answer

Discontinued operations and extraordinary items are both items that are considered to be nonrecurring, and therefore, they must be separately disclosed on the income statement. Discontinued operations refer to the disposal of a segment of a business, while extraordinary items refer to events that are both unusual in nature and infrequent in occurrence. Separately disclosing these items allows investors and financial statement users to better understand the company's financial performance and the impact of these nonrecurring items.

Two Special Items, Discontinued Operations and Extraordinary Items, Must Be