A material event
or transaction that is both unusual in nature and infrequent in occurrence. To be unusual in nature, the underlying event or transaction
must have a high degree of abnormality and be clearly unrelated to, or
only incidentally related to, the ordinary and typical activities of the
entity, taking into account the environment in which the entity operates.
Infrequency of occurrence relates to the requirement that the underlying
event or transaction should be of a type that would not reasonably be
expected to recur in the foreseeable future, taking into account the environment
in which the entity operates. The
material effect of individual events or transactions is considered separately
and not aggregated unless the effects result from a single identifiable
transaction or event that meets the definition of an extraordinary item.
could result if gains or losses were the direct result of any of the following
events or circumstances:
1. A major casualty, such as an earthquake.
2. An expropriation of property by a foreign government.
3. A prohibition under a newly enacted law or regulation.
The INCOME STATEMENT
should disclose captions and amounts for individual extraordinary events
or transactions on the face of the statement.
Income taxes applicable to the extraordinary item should be disclosed.
Extraordinary items can be reported as follows:
Income before extraordinary items
(less applicable income taxes of $XXX)
A material event
or transaction that is unusual in nature or occurs infrequently is reported
as a separate element of income from continuing operations and is not
classified as an extraordinary item.