Section 4
Additional Income Statement Considerations
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by Boundless
3 concepts
Impact of the Operating Cycle on the Income Statement
The accrual method ensures proper reporting on the income statement because the operating cycle doesn't coincide with the accounting cycle.
Reporting Irregular Items
Irregular items are reported separately from the income statement proper so that users can better predict future cash flows.
Special Reporting
Irregular items require special reporting procedures, and include discontinued operations, extraordinary items, and the reporting of the resultant EPS.