Final answer:
Discontinued operations will always be presented as a separate line item on the income statement, after income from continuing operations and before net income.
Step-by-step explanation:
Discontinued operations will always be presented as a separate line item on the income statement, after income from continuing operations and before net income. It is reported separately to provide users of the financial statements with information about the operations that are being discontinued.
Discontinued operations are typically shown net of tax and consist of two components: the income or loss from the discontinued operation and any gain or loss on disposal of the assets related to the discontinued operation.
For example, if a company decides to sell one of its divisions and that division qualifies as a discontinued operation, the income statement would show the income or loss from the discontinued division as a separate line item.