Wednesday, February 11, 2009

Extraordinary Items on Income Statement

One category of irregular events that is required by law to disclosed on the income statement is extraordinary items. An extraordinary item is a gain or loss incurred by the company that is defined as being:
  1. Unusual in nature
  2. Not expected to recur in the foreseeable future
Events such as these are rare and often do not appear in the income statements of a company. Some examples of an extraordinary items include damage caused earthquakes, volcanoes, and hurricanes.

Events like this can also be called an extraordinary loss

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