What is a 'One-Time Item'

A one-time item is a gain, loss or expense on the income statement that is nonrecurring in nature and therefore not considered part of a company's ongoing business operations. In order to get a true gauge of a company's operating performance, one-time items are usually excluded by analysts and investors while evaluating a company. One-time items most often have a negative impact on earnings, but may occasionally have a positive impact.


One-time items are recorded under operating expenses or below the EBIT line and then identified by management as "one-time" in its discussion of financial results or supplemental material for investors. One-time items on the income statement may be self-explanatory or would be discussed by the company in a similar manner described above.

Reporting one-time items separately is important to ensure the transparency of financial reporting. One-time items are exactly that — management does not expect them to occur again — so segregating these items explicitly on the income statement or in a discussion by management allows for a better assessment of the continuing income-generating capacity of the business. Management will flag certain one-time items, but whether an analyst or investor believes they are truly one-time and not, perhaps, once-in-a-while, is a different matter.

One-time items may include:

  • restructuring charge
  • asset impairment or write-off
  • loss from discontinued operations
  • loss from early retirement of debt
  • M&A or divestiture-related costs
  • gain or loss from an asset sale
  • extraordinary legal costs
  • natural disaster damage costs
  • charge stemming from a change in accounting policy

The treatment of one-time items has several implications related to analysis of company performance and valuation of its shares, credit agreements and executive compensation schemes. An analyst would have to make adjustments to the income statement to produce a "clean" look at EBIT, EBITDA and net income figures on which to calculate price multiples. Debt agreements would have to specify the exclusions to how certain covenants are calculated. Executive pay plans, too, would need to explain how one-time items are handled in compensation formulas.

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