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Financial Accounting / Elimination of Extraordinary Item Concept
« on: November 25, 2018, 05:08:44 PM »
Elimination of Extraordinary Item Concept
In January 2015, a new accounting standards update eliminated the idea of extraordinary items. This alleviated the need for companies and their auditors and regulators to assess if an extraordinary item had been classified and disclosed appropriately starting in the fiscal year of 2015. Also, companies are no longer required to evaluate the income tax effect of extraordinary items and present an EPS effect. This accounting update left reporting and disclosure requirements for unusual and infrequent events or transactions intact. While companies no longer must entitle events and their effects as extraordinary, they still have to disclose infrequent and unusual events on the income statement and their effect before income taxes. Also, GAAP allows companies to give these events more specific names, such as "Effects From Fire at Production Facility." The International Financial Reporting Standards (IFRS) do not include extraordinary items in their accounting practices.
Read more: https://www.investopedia.com/terms/e/extraordinaryitem.asp#ixzz5XrLwITld
In January 2015, a new accounting standards update eliminated the idea of extraordinary items. This alleviated the need for companies and their auditors and regulators to assess if an extraordinary item had been classified and disclosed appropriately starting in the fiscal year of 2015. Also, companies are no longer required to evaluate the income tax effect of extraordinary items and present an EPS effect. This accounting update left reporting and disclosure requirements for unusual and infrequent events or transactions intact. While companies no longer must entitle events and their effects as extraordinary, they still have to disclose infrequent and unusual events on the income statement and their effect before income taxes. Also, GAAP allows companies to give these events more specific names, such as "Effects From Fire at Production Facility." The International Financial Reporting Standards (IFRS) do not include extraordinary items in their accounting practices.
Read more: https://www.investopedia.com/terms/e/extraordinaryitem.asp#ixzz5XrLwITld