How to Report Earthquake Damages in the Income Statement
The Financial Accounting Standards Board Accounting Standards Codification states that: Extraordinary items shall be segregated from the results of ordinary operations and shown separately in the income statement, with disclosure of the nature and amounts thereof. (225-20-45-9) AND Descriptive captions and the amounts for individual extraordinary events or transactions shall be presented, preferably on the face of the income statement, if practicable; otherwise disclosure in related notes is acceptable.
The nature of an extraordinary event or transaction and the principal items entering into the determination of an extraordinary gain or loss shall be described. The income taxes applicable to extraordinary items shall be disclosed on the face of the income statement; alternatively, disclosure in the related notes is acceptable. Considering all of the above information my recommendations include: • Report all damages separately from net income. • Report as an extraordinary item. • Disclose in a note: 1.
How to Report Earthquake Damages in the Income Statement Essay Example
The nature of the extraordinary event. 2. The determination of how we came about deciding to classify as an extraordinary item. 3. Captions and amounts of extraordinary loss. (Including store damages, and losses due to the store being closed). I look forward to speaking with you further on the matter. Enclosures: Works Cited and Example Resources. Works Cited Spiceland, David, Sepe, Jim, Nelson, Mark. Intermediate Accounting. 6th ed. McGraw- Hill/Irwin. New York: McGraw-Hill/Irwin, 2011. Print Financial Accounting Standards Board Accounting Standards Codification.