Business Definition for: nonrecurring
nonrecurring
income statement item that is either unusual in nature or infrequent in occurrence. An example is the gain or loss on the sale of a fixed asset. Nonrecurring items are shown before arriving at income from continuing operations. They are not shown with a tax or earnings per share effect.
See also
extraordinary item
Related Terms:
one that is both unusual in nature and infrequent in occurrence. Extraordinary gains and losses are presented net of tax separately in the income statement. They appear between income from discontinued operations and cumulative effect of a change in accounting principle. Examples of extraordinary items are casualty losses, losses from expropriation of assets by a foreign government, gain on life insurance, gain or loss on the early extinguishment of debt, gain on troubled debt restructuring, and write-off of an intangible asset.
Write-down and write-off of receivables and inventory are not extraordinary because they relate to normal business operational activities. They would be considered extraordinary, however, if they resulted from an Act of God (e.g., casualty loss arising from an earthquake) or governmental expropriation.
Copyright © 2005, 2000, 1995, 1987 by Barron's Educational Series, Inc., Reprinted by arrangement with Publisher.