The required approach for handling extraordinary items in interim reports is to
A) prorate them over all four quarters.
B) prorate them over the current and remaining quarters.
C) charge or credit the loss or gain in the quarter that it occurs.
D) disclose them only in the notes.

Question

Quizplus · Accepted Answer

Extraordinary items should be charged or credited in the quarter that they occur, as they are material events that need to be reported timely and accurately in interim reports. Prorating them over multiple quarters could obscure the impact and significance of the event on the company's financial performance. Disclosing them only in the notes is not sufficient, as they could have a material impact on the financial statements and require recognition in the income statement.

The Required Approach for Handling Extraordinary Items in Interim Reports