Question

A company has decided to discontinue a component of its business but, when the reporting period ends, the component has not yet been sold. The amount that the company would report as income from discontinued operations is (ignore tax effects): Multiple Choice income from operations for the year and the amount by which the component’s fair value less cost to sell is greater than book value. income from operations for the year and the amount by which the component’s fair value less cost to sell is less than book value. only the amount by which the component’s fair value less cost to sell is less than book value. only the component’s income from operations for the year.

Answer 1

Answer: income from operations for the year and the amount by which the component’s fair value less cost to sell is less than book value

Explanation:

Discontinued operations is simply and accounting term which means the parts of the core business of a company that have either been shut down or divested.

With regards to the question, the amount that the company would report as income from discontinued operations would be the income or loss that was gotten from operations, that is revenues, the expenses, gains and the losses and the impairment loss.

Therefore, the correct answer will be option B "Income from operations for the year and the amount by which the components fair value less cost to sell is less than the book value".