[thebigguy1992]

I keep seeing in my ninja MCQ answer explanations “Note that the concept of “extraordinary” items has been eliminated from GAAP; the presentation for items that are unusual in nature or occur infrequently will be expanded to include items that are both unusual in nature and infrequently occurring.” Does that mean most extraordinary answer options are now not ever going to be the correct answer?

[CPYay]

Those items are eliminated from the I/S as a separate line item below Net Income. They are now included in Non-Operating Income. Not sure how a question could be worded (if even asked), but as long as you're aware of where they are on the I/S, you should be good.

[Andyred04]

Yes, you are correct, there is no such thing as an extraordinary item anymore for GAAP. I don't know what the last poster is talking about because extraordinary items are not on the I/S (because they aren't anywhere since). However, I believe they are still around for gov'tal accounting.

FAR: 80 (Gleim, Ninja Notes, Ninja MCQs)
REG: 87 (Gleim, Ninja Notes, Ninja MCQs)
BEC: 87 (Gleim, Ninja Notes, Ninja MCQs)
AUD: 8/27/16

PA Candidate

[Anonymous]

I took FAR last quarter. I didnt get a single extraordinary item related question or answer choice. So I am not sure you will see many questions on this topic.

@Andyred04. Extraordinary Items are removed from the I/S but those transactions have to go somewhere. I think @austidan is saying they are now in Non-Operating income. Haven't heard anything about that until now. I was under the impression you just leave them as a part of operating income.

[CPYay]

@Andyred04 @Sunni

I apologize for being unclear. My comment regarding Non-Operating Income was in response to an earthquake example from the Roger FAR video lecture.

You'd actually determine where in the I/S the transaction goes depending on its impact/circumstance. Extraordinary items are no longer presented independently in the I/S under GAAP, but as Sunni stated, a transaction still occurs and must be presented in the financial statements/disclosures if necessary. Where it ends up will depend on the transaction itself.

From KPMG via FASB
“The new guidance eliminates the separate presentation of extraordinary items, net of tax and the related earnings per share,but does not affect the requirement to disclose material items that are unusual in nature or infrequently occurring.”

[Author]

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