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Accounting Principles Board (APB) Opinion No.
30
a.
Reporting the Results of Operations
-- Reporting the Effects of Disposal of Segment
of a Business,
and
Extraordinary, Unusual and Infrequently
Occurring Events and Transactions
b. Issued in June 1973
Accounting
for the Disposal of a Segment of a
Business
(APB Opinion No. 30, Para. 13-18)
-->
deleted by
SFAS No. 144,
August 2001
Extraordinary Items
are events and
transactions that are distinguished
(a) by their
unusual nature
and
(b) by the
infrequency of their occurrence.
Unusual
Nature
--> high
degree of abnormality
--> clearly
unrelated (or only incidentally related)
--> to the ordinary
and typical activities of the enterprise
Infrequency
of Occurrence
--> not
reasonably expected to recur
--> in the
foreseeable future
Examples
of gains and losses NOT reported as extraordinary items
a.
Write-down or write off of
--> receivables, inventories, equipment
leased to others, or intangible assets
b. Gains or
losses from
--> exchange or translation of foreign
currencies
c. Gains or
losses on
--> disposal of a component of an entity
b. Gains or
losses from
--> sale or abandonment of property, plant, or equipment
used in the business
b.
Effects of
--> a strike
b. Adjustment
of accruals
--> on long-term contracts
Income
Statement Presentation
-->
extraordinary items should be reported separately on the income
statement
(as prescribed APB Opinion No. 9)
Income
Taxes applicable to extraordinary items
-->
should be disclosed on the face of the income statement;
--> alternatively,
disclosure in the related notes is acceptable.
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