IAS 33

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Non-Recurring Items

Non-Recurring and Extraordinary Items or Events In the unpredictable world of business, events will arise that are not expected and most likely not occur again. These one-time events are separated on the income statement and classified as either non-recurring or extraordinary. This allows investors to more accurately predict future earnings. If, for instance, you were considering purchasing a gas station, you would base your valuation on the earning power of the business, ignoring one-time costs such as replacing the station’s windows after a thunderstorm. Likewise, if the owner of the station had sold a vintage Coke machine for $17,000 the year before, you would not include it in your valuation because you had no reason to expect that profit would be realized again in the future.What is the difference between non-recurring and extraordinary events? A nonrecurring charge is a one-time charge that the company doesn’t expect to encounter again. An extraordinary item is an event that materially* affected a company’s finance and needs to be thoroughly explained in the annual report or SEC filings. Extraordinary events can include costs associated with a merger, or the expense of implementing a new production system [as McDonald’s did in the late 1990’s with the Made for You food preparation system]. Non-recurring items are recorded under operating expenses, while extraordinary items are listed after the net line, after-tax. *The term material is not specific. It generally refers to anything that affects a company in a meaningful and significant way. Some investors try to put a number on the figure, saying an event is material if it causes a change of 5% or more in the company’s finances.   Jeppe […]

By |August 28th, 2008|OTHER IFRS|0 Comments

IFRS reports of non listed companies

Hi All,   I am trying to determine if the IFRS financial statements of non listed companies are much different from the IFRS financial statements of listed companies.   I am looking for Financial Statements of non listed companies, it doesn't matter what country it's from. Example, dummy or "empty" reports are useful as well. Any [...]

By |August 28th, 2008|IFRS|0 Comments