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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
extraordinary itemsnon-recurring items of expense or revenue which do not arise in the normal course of trading; for example, losses associated with a major reorganization of a company division which involves significant sales of assets. Such losses would be deducted directly from the company's RESERVES below the line rather than being charges against the profits of the trading period, to avoid affecting the results of routine trading operations with one-off non-trading losses.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson