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 ?
Under pressure from the SEC, which viewed disclosures as inadequate, FASB defended its decision to mandate extraordinary item treatment of debt extinguishment gains and losses on the basis that this treatment was "a practical and reasonable solution" (SFAS 4, para.
In Q2 of the last fiscal, the company reported net profit of ` 1,137.31 crore, which included a gain of ` 214.29 crore and an extraordinary item of ` 52.89 crore.
Kuwait corporate earnings dropped 25 per cent year-on-year to $1.5 billion due to Wataniya's extraordinary item in first quarter of 2011.
The net loss for the quarter ended June 30, 2010 was ($12.0) million compared to net income before extraordinary item of $5.2 million from the comparative quarter ended June 30, 2009.
The most extraordinary item is the late, great Irish fighter Dan Donnelly's mummified right arm.
The extraordinary item still appears on some companies' income statements, but its much less common than it used to be, largely because of FASB Statement no.
This amount will be accounted for as an extraordinary item for the quarter ending September 30, 2004, will be included in distributable cash for the period and will be used to pay down debt.
This comes on top of the IASB's existing agenda, which includes proposals to eliminate the use of LIFO (last in, first out) accounting, expense recognition of stock options and the elimination of extraordinary item treatment.
YOUNGSTOWN, Ohio - Burdened by charges related to its Chapter 11 reorganization, Phar-Mor Inc.'s loss before an extraordinary item nearly doubled in the third quarter, as same-store sales and gross margins withered.
Statement 145 rescinds Statement 4, which required all gains and losses from extinguishment of debt to be aggregated and, if material, classified as an extraordinary item, net of related income tax effect.
The result was a $70.4 million loss before extraordinary items that was partially offset by a $19.7 million gain from early debt extinguishment as well as a $1.82 million fourth quarter gain from equity in an extraordinary item related to the company's Avatex affiliate.
AFTER TWO WEEKS OF BACK-AND-FORTH DELIBERATIONS AT THE END OF SEPTEMBER, members of the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB) decided against use of an extraordinary item treatment for losses incurred in connection with the September 11 terrorist attacks.

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