Page 21 - FINAL CFA I SLIDES JUNE 2019 DAY 7
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Session Unit 7:
24. Understanding Income Statements
LOS 24.f: Describe the financial reporting treatment and analysis of non-recurring items (including
discontinued operations, unusual or infrequent items) and changes in accounting policies.
Unusual or infrequent items, p.55
• Gains or losses from the sale of assets or part of a business, if these activities are not a
firm’s ordinary operations.
• Impairments, write-offs, write-downs, and restructuring costs.
tanties
Unusual or infrequent items are included in income from continuing operations and are
reported before tax.
CFA Implications, p54
Should these truly be included when forecasting future earnings?
Extraordinary items, p.55 -reported separately in the income statement, net of tax, after
income from continuing operations. From 1 December 15, 2015, no longer allowed
under US GAAP and IFRS has never allowed this!
