F-1 EXTRAORDINARY ITEMS Flashcards
1
Q
Define extraordinary items.
FAR 1-21
A
- Material in nature
- Of a character significantly different from the typical or customary business activities (unusual)
- Not expected to recur in the foreseeable future (infrequent)
- Not normally considered in evaluating the ordinary operating results of an enterprise.
Key words: Usual and infrequent
Remember: Extraordinary items are recognized under U.S. GAAP but not IFRS.
2
Q
Q: List some examples of extraordinary items.
FAR 1-22
A
- The abandonment of, or damage to, a plant due to an infrequent earthquake or an infrequent flood.
- An expropriation of a plant by the government.
- A prohibition of a product line by a newly enacted law or regulation.