![]() ![]() ![]() Today, GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards) do not recognize the formal use of extraordinary items it was eliminated in January 2015 to reduce the cost and complexity faced by companies in making financial statements.įeatures of an Extraordinary Item 1.Extraordinary gains and losses are often excluded by financial analysts while calculating the price-earnings ratio of a company to get a better sense of its profitability.An extraordinary item is an accounting term that refers to an abnormal gain or loss that is not generated from the ordinary business operations of a company, is infrequent in nature, and is unlikely to recur in the foreseeable future.
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