Chapter 4, Problem 4.2BYP

Judgment Case 4–2

Restructuring costs

• LO4–3

The appearance of restructuring costs in corporate income statements increased significantly in the 1980s and 1990s and continues to be relevant today.

Required:

1. What types of costs are included in restructuring costs?

2. When are restructuring costs recognized?

3. How would you classify restructuring costs in a multi-step income statement?

4. What factors would you consider in determining whether or not restructuring costs should be included in an assessment of a company’s permanent earnings?