Intermediate Accounting 4 The Income Statement and Income Recognition Operating Expenses perating expenses may be reported in two parts 1) Selling expenses 2) General and administrative expenses
Operating Expenses Intermediate Accounting 4 The Income Statement and Income Recognition Operating expenses may be reported in two parts: 1) Selling expenses 2) General and administrative expenses
Intermediate Accounting 4 The Income Statement and Income Recognition Other items Other items include recurring revenues and expenses not directly related to the company's primary operations. For example Rent revenue Interest revenue Dividend revenue Gains from the sale of assets Interest expense Losses from the sale of assets
Other items Intermediate Accounting 4 The Income Statement and Income Recognition ➢ Rent revenue ➢ Interest revenue ➢ Dividend revenue ➢ Gains from the sale of assets ➢ Interest expense ➢ Losses from the sale of assets Other items include recurring revenues and expenses not directly related to the company's primary operations. For example:
diate Accounting 4 The Income Statement and Income Recognition Below the line”|tems gaaP requires certain items be reported below the line?? and net of tax ‘ Below the line,” or following/ scone from Continuing Operations Net of tax requires the tax effect of the event be shown
“Below the Line” Items Intermediate Accounting 4 The Income Statement and Income Recognition ➢ GAAP requires certain items be reported “below the line” and net of tax. ➢ “Below the line,” or following Income from Continuing Operations. ➢ Net of tax requires the tax effect of the event be shown
diate Accounting 4 The Income Statement and Income Recognition Below the line”|tems Discontinued perations ° Extraordinary Items Changes in Accounting Principles
“Below the Line” Items Intermediate Accounting 4 The Income Statement and Income Recognition • Discontinued Operations • Extraordinary Items • Changes in Accounting Principles
diate Accounting 4 The Income Statement and Income Recognition Results from Discontinued Operations Examples from APB No 30 The sale by a diversified company of a major division that represented the companys only activities in the electronic industry
Results from Discontinued Operations Intermediate Accounting 4 The Income Statement and Income Recognition Examples from APB No. 30 The sale by a diversified company of a major division that represented the company’s only activities in the electronic industry