A loss from early extinguishment of debt, if material, should be reported as a component of income
A) After cumulative effect of accounting changes and after discontinued operations of a segment of a business
B) After cumulative effect of accounting changes and before discontinued operations of a segment of a business
C) Income from continuing operations
D) Before cumulative effect of accounting changes and before discontinued operation s of a segment of a business

Question

Quizplus · Accepted Answer

A loss from early extinguishment of debt is a part of the ongoing operations of the business and should be reported as a separate item within income from continuing operations. It should not be reported as a part of discontinued operations or accounting changes. Also, it should be reported before the cumulative effect of accounting changes, but after any other items such as revenue and expenses that relate to ongoing operations. Therefore, the best choice is C.

A Loss from Early Extinguishment of Debt, If Material, Should