Income Statement, Extraordinary and Unusual Items, ASC 225

Income Statement
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”

 Criteria for extraordinary items
1. Unusual nature
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

 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

[Note] The concept of extraordinary items was deleted by ASU 2015-01.

 

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