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A grocery chain with 900 stores closes 11 underperforming stores during the year. The chain continues to sell the same products in the same markets, and the closures do not have a major effect on its operations or financial results. In the same year, a flood destroys inventory at an inland distribution center. Flooding is not related to the chain's ordinary activities. The site had no prior flood, and an engineering report concludes that the failed dam has been removed and a similar event is not reasonably expected in the foreseeable future. Both amounts are material.
The two presentations affect different income-statement sections. A discontinued operation leaves income from continuing operations under ASC 205-20-45-1B. An unusual or infrequent item stays within continuing operations. Under ASC 220-20-45-1, its face amount is not presented net of income tax.