Eberswalde is a German piano manufacturer. Management decides that they will discontinue the 12 ft. grand piano because of negative contribution margins. Meanwhile, Eberswalde continues to generate considerable profits from their continuing operations. Eberswalde should only report overall basic EPS and overall diluted EPS.

Question

Quizplus · Accepted Answer

Eberswalde should report both overall basic EPS and diluted EPS, as well as discontinued operations separately if the discontinuation of the 12 ft. grand piano line qualifies as a discontinued operation under applicable accounting standards. This allows users of the financial statements to distinguish between ongoing and discontinued operations.

Eberswalde Is a German Piano Manufacturer