Business

Restructuring costs that were due as a result of a factory closing are part of a company’s operating income. These costs are incurred because the company is forced to reorganize and restructure their operations, usually in hopes of becoming more efficient. Although they are not normal expenses they are not unusual and therefore cannot be considered extraordinary losses. Operating income consists of normal business expenses and for some companies these restructuring costs can be frequent occurrences and are therefore a part of the operating income of a company.

Investments being sold and resulting in a loss that the company recognizes would be a part of the company’s other comprehensive income and it would also be reported net of tax. The loss is recorded as a separate component of shareholder’s equity. This comprehensive income includes items such as the investments loss that would not traditionally be included in net income that many believe should still be included on the income statement to get a fuller view of the company.

Foreign currency translation gains would be a part of the company’s other comprehensive income. Foreign currency translation gains would be reported net of tax as well. This is a part of comprehensive income as well because it is a gain that is not included in the main operating income of the company. The gains from when a company translates foreign currency into U.S. currency is not included in the company’s net income but it is still a part of stockholder’s equity and therefore still needs to be included in the financial statements, which is why it is considered a part of other comprehensive income.