Use of the Extraordinary Item

At its Mar 10, 2010, board meeting, FASB affirmed its prior tentative decision that a company should not present the effects of extraordinary, unusual, and infrequently occurring events and transactions as a functional category in the statement of comprehensive income, as has been required under the...

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Bibliographic Details
Published in:The CPA journal (1975) 2012-02, Vol.82 (2), p.26
Main Authors: Gamble, George O, Noland, Thomas R, Ranasinghe, Tharindra, Dhole, Sandip
Format: Article
Language:English
Subjects:
Accounting
Business combinations
Changes
Classification
Coal industry
Earthquakes
Equity method
Extraordinary items
FASB statements
Financial reporting
Financial statements
Fiscal years
Losses
Negative goodwill
Regulated industries
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Summary:At its Mar 10, 2010, board meeting, FASB affirmed its prior tentative decision that a company should not present the effects of extraordinary, unusual, and infrequently occurring events and transactions as a functional category in the statement of comprehensive income, as has been required under the Accounting Standards Codification Subtopic 225-20, Income Statement -- Extraordinary and Unusual Items. The board has moved one step closer to permanently eliminating extraordinary item reporting. The International Accounting Standards Board (IASB) already prohibits reporting extraordinary items. There are many good reasons to eliminate the extraordinary item category on the income statement. FASB's decision is certainly consistent with their goal of convergence with the standards issued by the IASB. Without the extraordinary item category, FASB has limited the available alternatives to separate unique income events from ordinary income and the associated earnings-per-share calculations. A major project on FASB's agenda is the revision of the format of the financial statements.
ISSN:0732-8435