A: The net profit from continuing operations is the balance of the total profit of the enterprise after deducting the income tax expenses. Net profit is the basis for drawing statutory reserve fund, drawing arbitrary reserve fund and distributing shareholders' dividends.
An enterprise shall separately list the profit and loss from continuing operations and the profit and loss from termination of operations in the income statement. Operating profit and loss arising from disposal, such as impairment loss and reversal amount arising from termination, shall be reported as termination profit and loss. If the disposal group to be put into use but not sold meets the relevant constitutive conditions in the definition of termination, it shall be reported as termination from the date of termination. Enterprises lose control of subsidiaries due to the sale of investment in subsidiaries and other reasons. And if the subsidiary meets the definition of termination, it shall report the relevant termination profit and loss in the consolidated income statement. The enterprise shall report the adjusted amount of profit and loss from termination disposal in the income statement as the profit and loss from termination.
How to understand sustainable management?
The so-called continuous operation means that the business activities of an accounting entity will continue indefinitely, and in the foreseeable future, the accounting entity will not suffer liquidation, dissolution and other changes and cease to exist.
The premise of sustainable operation requires that enterprises should continue their normal business activities when conducting financial accounting. Assets owned by enterprises should be consumed, sold, transferred and depreciated. According to the predetermined goal, all kinds of debts undertaken by enterprises should be repaid as scheduled.
Clarifying this basic premise means that the accounting entity will use assets according to the established purpose and pay off debts according to the established contract conditions, and accountants can choose accounting principles and methods on this basis.
The accounting of going concern enterprises should be based on non-liquidation. For example, the valuation of assets at cost is based on the assumption or premise of going concern. However, under the condition of market economy, survival of the fittest is the principle of competition. Every enterprise has the risk of business failure, and may be insolvent and forced to declare bankruptcy for legal reorganization. Once the accountant has evidence to prove that the enterprise will go bankrupt and liquidate, the basic premise or assumption of going concern will no longer be established, and the accounting of the enterprise must adopt the liquidation basis.
Under the assumption of going concern, assets can be valued at historical cost, and depreciation expenses can be extracted by stages under normal circumstances. Otherwise, asset appraisal, expense allocation during the benefit period, timely repayment of debts, owner's equity and operating results will not be confirmed.
Sustainable operation is the premise of accounting confirmation, measurement and reporting, and defines the time range of accounting.
What is the net profit from going concern? Let's talk about the concept of going concern. As long as there is no intention or sign of bankruptcy liquidation, the enterprise is based on going concern, which is comparable in auditing and accounting. The calculation of net profit can be obtained by subtracting all profit and loss expenses according to the normal profit calculation formula.