Income Statement
Extraordinary and Unusual Items
Extraordinary and Unusual Items
FASB issued an Accounting Standards Update, ASU 2015-01, in January 2015
Topic: Income Statement – Extraordinary and Unusual Items (asc 225-20)
The concept of extraordinary items was eliminated.
Unusual or infrequently occurring items are
presented as a separate component of income from continuing operations or
disclosed in the notes to financial statements
Extraordinary Items before ASU 2015-01
APB Opinion No. 30, June 1973
“Reporting the Results of Operations – Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and Transactions”
“Reporting the Results of Operations – Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and Transactions”
Criteria for extraordinary items
1. Unusual nature
2. Infrequency of occurrence
2. Infrequency of occurrence
Presentation of extraordinary items
1. Extraordinary items are
–> presented separately in the income statement
2. Earnings per share for extraordinary items
–> presented in the income statement or in the notes
–> presented separately in the income statement
2. Earnings per share for extraordinary items
–> presented in the income statement or in the notes
The following items are “not” extraordinary items
1. Effects of a strike
2. Gains or losses from the abandonment of property, plant and equipment
3. Impairment of receivables and inventories
4. Foreign currency translation gains or losses
5. Gains or losses from the disposal of an entity’s components
2. Gains or losses from the abandonment of property, plant and equipment
3. Impairment of receivables and inventories
4. Foreign currency translation gains or losses
5. Gains or losses from the disposal of an entity’s components
[Note] The concept of extraordinary items was deleted by ASU 2015-01.