How Unusual Items are Presented on an Income Statement

According to investopedia.com, the definition of an “unusual item” is the following: 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 out-of-the-blue occurrences, or accounting phenomena which are not likely to occur again in the future.

Lay Terminology

In more laymen’s terms, unusual items are items that you don’t frequently purchase or use. In many cases these are one-time instances, such as office supplies or even an emergency expense.

Presenting Unusual Items

Presenting unusual items may be difficult, and in some cases you may forget to report these items simply because these are not items you have to report on a regular basis; however, failing to include these in your reports could be detrimental to your expense reports given that they are still legitimate expenses.

Not sure how to present these items? That’s why it’s important that you hire an account an accountant who can help you determine how to best present these items on your income statement and how to avoid being audited for incorrect or inaccurate information.

Have an unusual item that you need help reporting? Leave your questions in the comments below and we can help you determine how to present it.

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