[Anonymous]

Wiley says no, the internet says yes.

What is the answer?

[Jsmith87]

I just looked at my intermediate book, “companies at one time reported gains and losses on extinguishment of debt as extraordinary items. In response to concerns that such gains or losses are neither unusual nor infrequent, the FASB eliminated extraordinary item treatment for extinguishment of debt.”

[TiffaNiffaNi]

Actually, it has the potential to be extraordinary if it is material in aggregate, unusual in nature, and has occurred infrequently. (pretty much the same criteria as other extraordinary items). Source: Becker F5-56, 2014 version.

FAR: 7/17/14- 79
AUD: 8/20/14- 91
REG: 10/1/14- 88
BEC: 11/10/14- 85

Becker Self-Study

[Jsmith87]

Okay. Overall I would say the gains and losses associated with debt extinguishment is not extraordinary. However, if for some reason this transaction fits the definition of extraordinary, then the company should report it as such.

[Anonymous]

Thanks. I saw that FASB had changed the recognition.

I'll be expecting the facts will tell me if it is extraordinary or not.

[Author]

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