Examples of extraordinary items include expenses to deal with a fire, earthquake, or uninsured losses from a flood, the gain or loss from early retirement of debt, or the expropriation of a property by a foreign government.

What is an exceptional item?

Exceptional items are costly events that have an impact on a company’s bottom line but must not be misread as gains or losses in routine business operations. An exceptional item is also a large number with a substantial impact on the company’s profit or loss, but it is closely related to its day-to-day business.

Can a sale of a business be an extraordinary gain?

In this case, gain or loss from the selling of a business is normal and not irregular or rare. Therefore, it cannot claim gain on account of selling long-term investments as extraordinary gains. Also, an important point is there is confusion with regards to treating write-off/write back of various assets as an extraordinary loss.

What’s the difference between extraordinary gains and extraordinary losses?

Extraordinary items can be bifurcated into extraordinary gains and extraordinary losses. Needless to say, losses have a negative impact on the profit of the company whereas extraordinary gains have a positive impact on the profit of the company.

What makes an extraordinary item in a financial statement?

Extraordinary Items. Extraordinary items are gains or losses in a company’s financial statements that are infrequent and unusual. Basically, an item is deemed extraordinary if it is not part of a company’s ordinary, day-to-day operations.

What is the net profit after extraordinary items?

We note that Net profit Attributable to Shareholders is RMB 2,633 million. However, when we remove the extraordinary items from the Income Statement, the Net Profit gets reduced to RMB 2,072 million.