What is an 'Exceptional Item'
An exceptional item consists of the charges incurred that must be noted on a company's balance sheet, in accordance with GAAP principles. Even though they are considered to be part of ordinary business charges, exceptional items must be disclosed due to their sheer size or frequency.
BREAKING DOWN 'Exceptional Item'
Don't confuse exceptional items with extraordinary items: the latter are not part of a company's ordinary business dealings. Exceptional items, on the other hand, are material and need to be documented in order to provide investors and regulators with accurate and informative financial statements.