What is a 'One-Time Charge'

A one-time charge is a charge against a company's earnings that the company's managers say they expect to be an isolated event that they expect is unlikely to occur again. A one-time charge can either be a cash charge against earnings such as the cost of paying severance expenses to laid-off former employees or a non-cash charge such as the writing down of the value of assets such as a piece of real estate whose market value has fallen due to changes in business fundamentals or consumer preferences. Financial analysts routinely exclude one-time charges when they evaluate a company's ongoing earnings potential.

BREAKING DOWN 'One-Time Charge'

Some one-time charges do indeed only take place once. However, many companies incorrectly record charges that they repeatedly incur in the course of their usual business activities as one-time charges. This practice may make the company’s financial health look better than it really is and it is a practice that investors should be aware of.

For example, Acme Technology Company may properly write off costs related to restructuring its file server business as a one-time charge. However if the company also writes down inventory costs every other quarter and reports these charges as one-time charges, it is less than clear that these inventory write-down charges are truly one-time charges and Acme’s financial circumstances may be somewhat different than investors and analysts are being led to believe by the company.

  1. Cash Charge

    A cash charge is a non-recurring charge against company's earnings, ...
  2. Sales Charge

    A sales charge is a commission paid by an investor on his or ...
  3. Restructuring Charge

    A restructuring charge is a one-time cost that must be paid by ...
  4. Non-Cash Charge

    Non-cash charges are expenses that can be found in a company's ...
  5. Finance Charge

    A finance charge is a fee charged for the use of credit or the ...
  6. Minimum Finance Charge

    A minimum finance charge is the least amount of interest a borrower ...
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