The FASB's Conceptual Framework Classifies Gains and Losses Based on Whether

question 54

Short Answer

The FASB's conceptual framework classifies gains and losses based on whether they are related to an entity's major ongoing or central operations.These gains or losses may be classified as $\begin{array}{lcc} & \text { Nonoperating } & \text { Operating } \\\text { a. } & \text { Yes } & \text { No } \\\text { b. } & \text { Yes } & \text { Yes } \\\text { c. } & \text { No } & \text { Yes } \\\text { d. } & \text { No } & \text { No }\end{array}$

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Definitions:

Sarbanes-Oxley Act

A United States federal law that set new or expanded requirements for all U.S. public company boards, management, and public accounting firms, aiming to protect investors from fraudulent financial reporting.

PCAOB

The Public Company Accounting Oversight Board, an organization established to oversee the audits of public companies to protect the interests of investors.

Public Accounting Firms

Professional service organizations that provide auditing, tax, consulting, and accounting services to businesses and individuals.

CDOs

Collateralized Debt Obligations, a type of structured asset-backed security (ABS) with different tranches that can be impacted by mortgage, auto loan, and credit card debt defaults.