Question

A company has decided to discontinue a component of its business and sells the component by the end of the year. The amount that the company would report as income from discontinued operations is (ignore tax effects): 

Multiple Choice 

• only Income from operations for the year. 

• only the gain or loss on the disposal of the component's assets. 

• Income from operations for the year and only a loss on the disposal of the component's assets. 

• Income from operations for the year and either a gain or loss on the disposal of the component's assets.

Answer 1

Solution:

The amount to be reported as income from discontinued operations is "Income from operations for the year and either a gain or loss on the disposal of the component's assets".

Hence last option is correct.