Unusual Item

DEFINITION of 'Unusual Item'

In financial accounting, unusual items are line items on an income statement which are reported separately from the normal income of the business due to their irregular nature. Unusual items can generally be categorized as one of three types: extraordinary items, discontinued operations and adjustments due to a change in accounting methodology. As a general guideline, unusual items can be thought of as being either strange one-off occurrences or accounting phenomena that are not likely to occur again in the future.

BREAKING DOWN 'Unusual Item'

Reporting unusual items separately is important to ensure the transparency of financial reporting. Unusual items are unlikely to recur, so separating these items allows users to better assess the continuing income generating capacity of the business. Investors are focused on the future returns that a company is able to generate, and often prefer to ignore unusual fluctuations which may obscure a company's true prospects.

RELATED TERMS
  1. Special Item

    A large expense or source of income that a company does not expect ...
  2. Extraordinary Item

    Gains or losses included in a company's financial statements, ...
  3. Excluding Items

    The common practice of leaving certain factors out of an overall ...
  4. One-Time Item

    An accounting item in a company's income statement that is non-recurring ...
  5. Non-Core Item

    Items that are considered outside of normal activities or operations. ...
  6. Big Ticket Item

    Big ticket items are high-value items, such as houses and cars, ...
Related Articles
  1. Fundamental Analysis

    Financial Statement: Extraordinary Vs. Nonrecurring Items

    When it comes to analyzing a company, successful analysts spend considerable time differentiating between accounting items that are likely to recur going forward from those that most likely will ...
  2. Professionals

    Income Statement Components

    CFA Level 1 - Income Statement Components. Learn the various components required to calculate net income for income statements. Looks at recurring and non-recurring items.
  3. Professionals

    Income Statement: Non-recurring Items

    CFA Level 1 - Income Statement: Non-recurring Items. This section focuses on nonrecurring income statement items. Provides examples on various infrequent and extraordinairy entries.
  4. Professionals

    The Income Statement

    Income Statement
  5. Personal Finance

    4 Wild Company Headquarters

    Here's a list of companies with very unusual offices.
  6. Investing

    Household Items You Need To Insure

    Your homeowner's insurance doesn't cover everything.
  7. Options & Futures

    Financial Statements: Earnings

    By David Harper (Contact David)In this section, we try to answer the question, "what earnings number should be used to evaluate company performance?" We start by considering the relationship ...
  8. Professionals

    Exclusion Items Vs. Deferral Items

    Exclusion Items Vs. Deferral Items
  9. Investing

    5 Household Items You Should Insure

    Your homeowner's insurance doesn't cover everything you own and the items it does cover are only partially insured if theyre high-priced items.
  10. Active Trading

    Those in Management are Often Shareholders Too

    We all know that publicly traded companies are enthralled by their stocks, but why? Here we take a look at the top 5 reasons why companies care so much about their stock prices.
RELATED FAQS
  1. What is the accounting treatment for unusual or infrequent items for IFRS and U.S. ...

    Learn to identify the unusual or infrequent items listed on an income statement prepared according to either US GAAP or IFRS ... Read Answer >>
  2. What is the difference between cost and price?

    Consider how cost affects a product's price. Corporate expenses and the current cost of living both impact the final sticker ... Read Answer >>
  3. What's the difference between the substitution effect and price effect?

    Learn how the increase in an item's price affects consumer demand. Explore the differences between the substitution and price ... Read Answer >>
  4. What are the differences between operating expenses and SG&A?

    Learn what businesses mean when they list operating expenses or SG&A as line items on an income statement; understand how ... Read Answer >>
  5. What's the difference between the substitution effect and the income effect?

    Learn the difference between the income effect and the substitution effect in terms of spending money. Predict which direction ... Read Answer >>
  6. What does it mean when advertisers say that "financing is available"? Should I trust ...

    When an advertisement says "financing", it means that the seller is going to give you a loan on an item that you purchase. ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center