Since abnormal loss occurs on a particular date, and closing profits are reflected after reducing abnormal loss, we increase closing profit by abnormal loss to arrive at normal profit which the business would have earned, if such loss was not incurred. These profits are then allocated for time adjustement. After that, we reduce abnormal loss from Pre or Post acquisition profts, as the case may be. Since abnormal gain occurs on a particular date, and closing profits are reflected after adding abnormal gain, we reduce closing profit by abnormal gain to arrive at normal profit which the business would have earned, if such gain was not earned. These profits are then allocated for time adjustement, if any. After that, we add abnormal gain to re or Post acquisition profts, as the case may be.
