Page 20 - FINAL CFA I SLIDES JUNE 2019 DAY 7
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Session Unit 7:
24. Understanding Income Statements
LOS 24.f: Describe the financial reporting treatment and analysis of non-recurring items (including
discontinued operations, unusual or infrequent items) and changes in accounting policies.
Non-Recurring Items, p.54
Discontinued operations –a segment or business unit that management has decided to dispose of, but
either has not yet done so, or has disposed of in the current year after the operation had generated
income or losses.
tanties
CFA Implications, p54
Discontinued operations should not affect net income from continuing operations and hence should be
excluded when forecasting future earnings for the earnings method of valuation but the actual disposal
may help with projecting future cash flows.
