Guys, how do we determine whether an event is extraordinary or not… Difference between “unusual or infrequent” and extraordinary items is not very clear to me… Help pls…
extraordinary has to be both unusual and infrequent my brother from another mother, only recognized under GAAP
I know… But if you are giving one event X, how would you decide whether its extraordinary or just “infrequent or unusual”… I think its totally subjective decision… and depends upon a particular scenario… Any tips pls…
You are correct in the fact that these items are subjective to a certain extent, but that is why most analysts exclude them from future earnings projections.
if it will never occur again given the company’s environment,industry, or geography, it will be classified as extraordinary
It should be recongnized only when the item is material and occurs rarely. Under IFRS , it is not allowed to show extraordinary items. Cheers Sumo