Team Project: Special Income Items Using an-

* nual reports available through your library or by using an

- electronic database, find at least one company that reports the following:

a.

b.

A change in accounting principle: By reading the management discussion section and notes to the financial statements, determine the motivation of the company for the change. What was the impact on reported net income for the year of the change? What is the likely impact on future accounting periods? By how much would the previous year’s income have been different if the new method had been used then? From the viewpoint of an investor or creditor, was this a wise change? Explain.

An extraordinary item: What event led to the extraordinary item? What impact did the amount reported have on income for the period in which it was reported? Does the company indicate any change in policy or future operating procedures as a result of the extraordinary item?

c. Discontinued operations: What appeared to be the primary motivation for disposing of the operations? Was a gain or loss reported? What was the impact on reported income for the period? What effect is the disposition likely to have on future operating results?
_