The CFAI curriculum discusses restructuring and one-off impairment charges in reading 20; and says that they should both be considered as expenses which in reality have been incurred over several periods before and several periods after the accounting provision was booked - therefore an analyst needs to smooth the expenses out over this before/after period.
I understand the logic for impairment charges - an asset has been depreciating too slowly and isn’t being expenses in a manner that’s reflective of it’s value in use over time. However; I disagree that restructuring charges make sense to smooth over time - this doesn’t make sense. IAS criteria are very specific on when restructuring charges need to be booked; there isn’t a whole lot of grey from a timing perspective. Additionally; I think it makes a lot more sense to normalize earnings/revenue/expenses based on the reduced production (and likely sales) resulting from a restructure so that we’re essentially reclassifying those P&L items as “from discontinued ops” for the previous and future years in our model - rather than simply smooth out the expense.
Thoughts?