Extraordinary Item | ||
What is it? | ||
An extraordinary item is an unusual one-time gain or loss on the income statement. Some examples: a gain on the disposal of a segment of a business; a loss associated with a hailstorm that destroys a crop in an area that rarely has hailstorms. | ||
Pitfalls | ||
Can't collect money owed. Due to the unusual and/or infrequent nature of these items, it's advisable to be skeptical of them. |
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Weapons | ||
The footnotes to the financials. Each extraordinary item should be explained. Take a close look to make sure it's reasonable and unlikely to occur again. | ||