If signilK'anl changes aix’ marie in the accounting principles .ipplied Irom one periorl to llu' next, why should the I’flecl of ihe.sr- r h.inges be disi lo.sed in the financial slalemenls?

(S. A corporation ix'ports r'arnings prM' share of $l.,kS lor the iitosi ir'cent yeai .md $1.10 for the pixxcding year. Tlu' $l.,kS iiu ludes ,i $0. i5 per shaix' gain Irom in surance proixxxls ix'lated to a hilly depreeialeil asset that was destioyed by lire,

a. Should the composition of lln’ $l,.kS be ilisr losixl in iIk' linaiui.il reporl.s?

b. On the basis of llu‘ limilerl inform.ilion presiailed, would you eoneludi* ih.il operations harl improved or rleeliiuxl?

AppendixLO1