extraordinary item

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.

Extraordinary Item

A large gain or loss in a company's earnings due to a non-recurring event that is out of the company's control. For example, a water distribution company may have unusually high earnings from sales because a natural disaster required relief organizations to purchase large quantities of clean water. On the other hand, it may have low earnings from sales because all the relief organizations had previously stocked up on water and did not need to buy any more. Extraordinary items are reported separately from the company's other financial statements so as to give a clearer picture of how the company is actually performing. Publicly-traded companies must report extraordinary items to shareholders in quarterly and annual reports and explain why they do not constitute a substantial increase or decrease in the company's health.

extraordinary item

An infrequently occurring transaction or event that, if material, is reported separately from continuing operations.
References in periodicals archive ?
First, when working on various examples to illustrate what would qualify for extraordinary item treatment, Lucas says, "We came to the conclusion that no matter what we did, the extraordinary item would never be able to capture what really was the direct effect of this unprecedented event.
Twelve months ended December 31, 1999 1998 Operating revenues $362,336 $356,210 Operating income 77,395 97,600 Net income applicable to common stock before extraordinary item 32,258 43,929 Loss from extraordinary item (1,141) -- Net income applicable to common stock $31,117 $43,929 Basic EPS: Net income applicable to common stock Before extraordinary item $32,258 $43,929 Loss from extraordinary item (1,141) -- Net income applicable to common stock $31,117 $43,929 Average common shares outstanding 38,528 37,028 Net income (loss) per common share Before extraordinary item $.
30 defines an extraordinary item as one which is both unusual in nature and infrequent in occurrence.
41) Earnings (loss) before extraordinary item and cumulative effect of accounting change .
A company that does not report a discontinued operation but reports an extraordinary item or cumulative effect of an accounting change should report basic EPS for net income before extraordinary items or net income before accounting change and net income on the face of the income statement.
3 Months Ended September 30 1998 1997 Revenues 752,361,000 344,806,000 Pre-tax earnings from continuing operations before non-recurring, and extraordinary items 72,609,000 34,275,000 Earnings from continuing operations before non-recurring, and extraordinary items 42,839,000 20,908,000 Non-recurring items (net of tax) -- -- Earnings from continuing operations before extraordinary items 42,839,000 20,908,000 Discontinued operations, (net of tax) (201,180,000) (244,000) Earnings (loss) before extraordinary item (158,341,000) 20,664,000 Extraordinary items (net of tax) -- (2,384,000) Net earnings (loss) (158,341,000) 18,280,000 Earnings per common share: Basic: Earnings from continuing operations before non-recurring and extraordinary items .
VNU expects the sale of the Consumer Information and Educational Information groups to result in an after tax extraordinary item of approximately EUR 1 billion.
Specifically, the Task Force decided against use of an extraordinary item treatment for losses incurred in connection with the recent terrorist attacks.
2 million, after tax, related to the IntegraCare merger which was treated as a pooling of interests and an extraordinary item of $508 thousand, after tax, for early extinguishment of debt.
For the year, income from continuing operations before income tax provision, cumulative effect of change in accounting principle and extraordinary item increased $5.
Net income before an extraordinary item was $3,682,000, compared to $3,435,000 in 1993, an increase of 7%.

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