Extraordinary items:
A)include the expropriation of a company's assets by a foreign government.
B)include the loss from the sale or exchange of equipment.
C)are treated the same under IFRS and GAAP.
D)include the gains and losses due to management restructuring.

Question

Quizplus · Accepted Answer

Extraordinary items are events or transactions that are unusual in nature and infrequent in occurrence, and that can have a significant impact on a company's financial performance. Expropriation by a foreign government qualifies as an extraordinary item because it is an unusual event that is beyond the control of the company and is not expected to recur frequently. Loss from the sale of equipment and gains/losses due to management restructuring are not necessarily unusual or infrequent, and are not always classified as extraordinary items. Also, while IFRS and GAAP have similar definitions of extraordinary items, there may be some differences in their specific classifications.

Extraordinary Items