[المحاسب المتميز]

Hey CPAs and Accounting students. I have a basic accounting question.

My textbook says (paraphrase):

When a company classifies a component as held for sale it reports it as an after-tax loss or gain, along with the income (loss) from the operations of the held-for-sale component. Since the fair value of the company is always changing, the company has to re-adjust the book value of the company each quarter to reflect the re-adjusted gain/loss. The company combines these quarterly gains (losses) and reports only one net gain (loss) in its annual financial statements. If the company reports a gain, this is a rare case where a gain is reported prior to realization.

My question is, how are these adjustments reflected in the quarterly and annual reports?

Say a company declares a component as held-for sale before Q2. If it isn't able to find a buyer before Q3 and Q4, how does the company declare the adjusted gain/loss in the quarterly report for Q3 and Q4?

If someone could give me some actual examples of financial reports, I would get a better understanding.

From my current understanding, the unrealized gain/loss for the component is reported in each quarterly report until it is sold, in which case it becomes a realized gain/loss. However, if the unrealized gain/loss is incorporated into part of the income/loss from discontinued operations and decreases the Net Income for each quarter, doesn't this understate the net income for the quarter? Essentially, reporting the gain/loss every quarter when it only happened in one quarter messes up the cumulative net income for the year.

I just started learning accounting by myself so please be gentle. =)

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