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Simple English definitions for legal terms
extraordinary item
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A quick definition of extraordinary item:
An extraordinary item is an unusual or infrequent expense that a business incurs, such as a large judgment or write-off of goodwill. It is different from regular expenses that a business incurs in its day-to-day operations. Extraordinary items are sometimes allowed to be excluded from a company's financial statements to give a clearer picture of its ongoing operations.
A more thorough explanation:
Definition: An unusual or infrequent expense, such as a write-off of goodwill or a large judgment.
Example: A company may have an extraordinary item if they experience a natural disaster that causes significant damage to their property and requires unexpected expenses to repair. This expense is not a regular part of their business operations and is considered extraordinary.
Explanation: An extraordinary item is a one-time expense that is not expected to occur regularly in a company's operations. It is usually a significant expense that is not related to the company's day-to-day activities. In the example given, the natural disaster is an unforeseen event that requires the company to incur expenses that are not part of their regular operations. This expense is considered extraordinary because it is not expected to occur regularly and is not related to the company's normal business activities.