Response to the following problem:
A corporation reports earnings per share of $1.38 for the most recent year and $1.10 for the preceding year. The $1.38 includes a $0.45-per-share gain from insurance proceeds related to a fully depreciated asset that was destroyed by fire.
a. Should the composition of the $1.38 be disclosed in the financial reports?
b. On the basis of the limited information presented, would you conclude that operations had improved or declined?