Gain On Discontinued Operations Income Statement

Both the results of operations of the discontinued component and also the gain loss on the sale should be reported as components of other comprehensive income.

Gain on discontinued operations income statement. Create a separate section titled discontinued operations on the income statement. Income or loss from discontinued operations is a line item on an income statement of a company below income from continuing operations and before net income. Ifrs 5 non current assets held for sale and discontinued operations require entity to report any gains or losses from discontinued operations as a single post tax net of tax line item in the income statement after computation of profit from continuing operations. Below is an example of a single step income statement containing discontinued operations.

The total gain or loss from the discontinued operations is thus reported followed by the relevant income taxes. The two components of this disclosure are the profit or loss from the discontinued operations and the gain or loss from disposal. List the gain separately from the income from continuing and discontinued operations on the income statement. If this were a corporation income tax expenses would be part of the income statement and the gain on discontinued operations would be reduced by the income tax expense associated with the gain.

Detailed disclosure of revenue expenses pre tax profit or loss and related income taxes is required either in the notes or in the statement of comprehensive income. This tax is often a future tax benefit because discontinued operations often incur. Disclose the results from discontinued operations on the income statement or in accompanying notes. In this example add 40 000 and 35 000 to get 75 000 in total income from discontinued operations net of taxes.

List the gain from the disposal of the business segment separately on the financial statement. Add together the income from discontinued operations net of taxes and the gain on sale net of taxes to calculate the total income from discontinued operations net of taxes. If the entity presents profit or loss in a separate statement a section identified as relating to discontinued operations is presented in that separate statement. If the company does not have any gain or loss on discontinued operations this section is not reported and this amount is reported as net income.

It represents the after tax gain or loss on sale of a segment of business and the after tax effect of the operations of the discontinued segment for the period. The label identifying the gain must clearly identify the proceeds as derived from the sale of the segment. Earnings per share from both income form continuing operations and net income should be disclosed on the face of the income statement. Such presentation help users assess financial performance better.