An extraordinary item is also an unusual charge but does not accrue during the ordinary course of business and does not need to be reported.Īn exceptional item may be either an outgoing charge or an incoming surplus of significant size. If the reorganization continues for the next several years, the transaction costs continue to be listed as 'exceptional items' for the subsequent years until the reorganization is complete.Īn exceptional item should not be confused with an extraordinary item. The large transaction costs would be reported as an 'exceptional item' on the balance sheet because it was significant and unusual. It may choose to undergo restructuring which costs a significant amount of money and is unusual during the normal cycle of business. Let's assume Company ABC is experiencing poor business.
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