How Are Income And Losses Accounted For On Interim Reports?
Income statement items after income from continuing operations (e.g., income from discontinued operations, extraordinary items, cumulative effect of a change in accounting principle) should be presented net of the tax effect. The tax effect on these unusual line items should be reflected only in the interim period when they actually occur. Caution: Do not predict items before they occur. Prior period adjustments in the retained earnings statement are also shown net of tax when they take place.
