Financial Statements - Income Statement: Non-recurring Items INCOME STATEMENT: NONRECURRING ITEMS
Within this section we will further our discussion on the non-recurring components of net income, such as unusual or infrequent items, discontinued operations, extraordinary items, and prior period adjustments.
Unusual or Infrequent Items Included in this category are items that are either unusual or infrequent in nature but cannot be both.
Examples of unusual or infrequent items: Gains (or losses) as a result of the disposition of a company's business segment including: Plant shutdown costs Lease-breaking fees Employee-separation costs Gains (or losses) as a result of the disposition of a company's assets or investments (including investments in subsidiary segments) including: Plant shut-down costs Lease-breaking fees Gains (or losses) as a result of a lawsuit Losses of operations due to an earthquake Impairments, write-offs, write-downs and restructuring costs Integration expenses related to the acquisition of a business
Accounting treatment is usually displayed as pre-tax. That means that they are displayed on the income statement after income from continuing operations gross of tax implication.
Extraordinary Items Events that are both unusual and infrequent in nature are qualified as extraordinary expenses.
Example of extraordinary items: Losses from expropriation of assets Gain (or losses) from early retirement of debt