Thursday, January 17, 2008

What is Extraordinary Loss?

What is an extraordinary loss?

An extraordinary loss is a loss that is unpredictable, infrequent in occurrence, and completely unforeseen. Extraordinary Losses are reported separately, less applicable taxes, in the company's income statement. GAAP requires that these losses be reported to outside parties. Sometimes, companies have gains or losses that do not reflect normal operations and that are not likely to happen again.

Examples of Extraordinary Loss:

  • Certain Acts of Terrorism
  • A Hurricane on Lake Erie
  • An earthquake in New York City
  • Monsoon in Chicago
  • Pirate Attacks
  • Meteor
These extraordinary loss items still must be reflected on financial statements. 

See Also Extraordinary Items

No comments:

Popular Accounting Problems

The information on this site is for informational purposes only and should not be used as a substitute for the professional advice of an accountant, tax advisor, attorney, or other professional.