Allocating income taxes within a particular reporting period. Each of the following items should be reported net of its respective income tax effects:
Income (or loss) from continuing operations
Discontinued operations
A taxable gain on disposal of a discontinued operation increases a company’s taxable income, and therefore its tax expense. A deductible loss on disposal reduces a company’s taxable income, and therefore its tax expense.
Four types of gains and losses that traditionally haven’t been included in income statements are OCI items related to:
Investments
Postretirement benefit plans
Derivatives
Foreign currency translation
These OCI items are reported net of their respective income tax effects.