extraordinary item

Extraordinary Item

Gains or losses included in a company's financial statements, which are infrequent and unusual in nature. These are usually explained further in the "notes to the financial statements."

Notes:

These are the result of unforeseen and atypical events. They are usually accounted for separately so they don't skew the company's regular earnings.

An example would be a snowstorm in Hawaii creating extraordinary losses to banana crops. These losses might be written down as a one-time charge due to an extraordinary item.

See also: Balance Sheet, Fundamental Analysis, Income Statement, Write Down

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Extraordinary item

An unusual and unexpected one-time event that must be explained to shareholders in an annual or quarterly report, e.g., write down for a discontinued operation, employee fraud, a lawsuit, or other one-time events. Results are often presented with and without these items. The logic of excluding these items is that investors have a better notion of future performance if one-time events are excluded. Differs from an unusual item in that extraordinary items are (1) material; (2) non-recurring; and (3) outside the ordinary nature of the business.

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extraordinary item

An infrequently occurring transaction or event that, if material, is reported separately from continuing operations.