| Some times, we can see certain exceptional items being included in the Income statement of an entity. So what is this exceptional items?
Exceptional items are expenses and or income:-
- Which arise from the normal operation of an entity but are not within the usual range like unusually large amount of bad debts.
- 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
|