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Regulation S-X prescribes certain line items and subtotals in the income statements of SEC registrants. Reporting entities that are not SEC registrants frequently follow this guidance as well.

3.8.1 Income or loss before income tax expense

Income or loss before income tax expense is required to be presented separately on the face of the income statement by S-X 5-03.

3.8.2 Income tax expense

S-X 5-03 requires only taxes based on income to be included under this caption. See FSP 16 for presentation and disclosure considerations related to income taxes.

3.8.3 Equity in earnings of unconsolidated entities

Equity in the earnings of an unconsolidated entity accounted for using the equity method should be separately stated. See FSP 10 for presentation and disclosure guidance for equity method investments.

3.8.4 Income or loss from continuing operations

S-X 5-03 requires income or loss from continuing operations to be presented separately on the face of the income statement.

3.8.5 Discontinued operations

A disposal that meets the requirements under ASC 205-20 is reported as discontinued operations on the face of the income statement. This is also consistent with the requirements of S-X 5-03. See FSP 27 for further guidance on presentation and disclosure guidance for discontinued operations.

3.8.6 Cumulative effects of changes in accounting principles

ASC 250 includes guidance on presentation of the cumulative effect of a change in accounting principles. See FSP 30 for further discussion of the requirements.

3.8.7 Net income or net loss

S-X 5-03 requires that net income or net loss be presented on the face of the financial statements. ASC 220 includes guidance on what comprises net income.

ASC 220-10-45-7A

Net income shall reflect all items of profit and loss recognized during the period with the sole exception of error corrections as addressed in Topic 250. However, the requirement that net income be presented as one amount does not apply to the following entities that have developed income statements with formats different from those of the typical commercial entity:
  1. Investment companies
  2. Insurance entities
  3. Certain not-for-profit entities (NFPs).

Net income includes earnings attributable to both the controlling and noncontrolling interests. ASC 810-10-45-18 through 21 indicate that reporting entities that report a noncontrolling interest are required to apportion net income for the period between controlling and noncontrolling interests on the face of the income statement.

3.8.8 Net income attributable to noncontrolling interests

S-X 5-03 requires a parent company that has control of a reporting entity to record consolidated revenues, expenses, gains, losses, net income (loss), and other comprehensive income (loss). For more on presentation and disclosure requirements associated with noncontrolling interests, see FSP 18.

3.8.9 Earnings per share data

Reporting entities with simple capital structures (i.e., those reporting entities with only one class of common stock outstanding and no equity instruments outstanding, such as stock options) must present basic per-share amounts for income from continuing operations and for net income on the face of the income statement as required by Regulation S-X, Rule 5-03. All other reporting entities must present basic and diluted per-share amounts on the face of the income statement for income from continuing operations and for net income with equal prominence. See FSP 7 for further discussion of the EPS presentation requirements.
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