A corporation reports earnings per share of \(\$ 1.38\) for the most recent year and \(\$ 1.10\) for the preceding year. The \(\$ 1.38\) includes a \(\$ 0.40\)-per-share gain from insurance proceeds related to a fully depreciated asset that was destroyed by fire.

a. Should the composition of the \(\$ 1.38\) be disclosed in the financial reports?

b. On the basis of the limited information presented, would you conclude that operations had improved or declined?

LO12