The principal benefit of separately reporting discontinued operations is to enhance:
A) predictive ability of future profitability.
B) consistency in reporting.
C) intraperiod continuity.
D) comprehensive reporting.

Question

Quizplus · Accepted Answer

Separately reporting discontinued operations can help users of financial statements make better predictions about future profitability by providing clear and transparent information about the impact of these operations on current and future earnings. This information can be useful in making investment and other financial decisions. While reporting discontinued operations can also improve consistency in reporting, intraperiod continuity, and comprehensive reporting, these are secondary benefits compared to the primary benefit of enhancing predictive ability.

The Principal Benefit of Separately Reporting Discontinued Operations Is to Enhance