Exceptional items are expenses and or income:-

1. Which arise from the normal operation of an entity but are not within the usual range like unusually large amount of bad debts.
2. Items that do not occur regularly like company’s reconstruction

The accounting standard requires such items to be classified under exceptional items and be disclosed.

Examples of such exceptional items are:

• Restructuring costs,
• Discontinued operations,
• Litigation settlements;
• Reversals of provisions
• Disposal of non-current assets and long-term assets
• Write down of inventory to net realizable value
• Unusually high level of bad debts to be written off