Reporting of items (e.g., discontinued operations) within an accounting period on the income statement or statement of retained earnings net of tax. Such allocation relates the income tax expense of the fiscal period to the specific items that give rise to the amount of the tax provision. It helps financial statement users better understand the impact of income taxes on the various components of net income, and it discourages statement readers from using pretax measures of performance when evaluating financial results.

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Answer The description you provided pertains to the concept of Income Tax Allocation Income tax allocation involves the allocation of income tax expen... View the full answer