Normalised Income

WHat is it? Is it just NI after you make all the adjustments (LIFO COGS, etc)

It’s NI adjusted for nonrecurring transactions. For example, if there was a gain from discontinued operations (reported net of tax on the income statement), then you would subtract that from NI to get the Normalized Income.

thanks, is it just nonrecurring tranactions?

I think so. But there’s many of those! I’m reading the CFAI text right now, and in their example I see: After tax: -early debt retirement -state tax adjustment -stock option grants Pre tax: -restructuring charges -loss (gain) on asset sales -interest capitalization -goodwill amortization

But for example, you wouldn’t consider unrealized capital gains from AFS positions, because they’re not contained in NI. You’d consider those when it comes to comprehensive income. What I didn’t get at first is that to get Normalized Income, you remove stuff (positive or negative) from the NI. To get comprehensive income, you add positions (positive or negative) to the NI.

thanks man, hopefully it should be quite obvious what’s not recurring in the exam, can’t learn any more lists!