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IFRS Standards allow them to display certain amounts separately on the face of the income statement, but identifying the effect specifically attributable to COVID-19 may be difficult disclosure in the notes may be a better route. Other standards affecting Section 5: Section 35.9(d) mandates that where a business was previously considered a discontinued operation under old GAAP it is not adjusted on transition to new GAAP.From the IFRS Institute – August 28, 2020Īs COVID-19 continues to affect financial performance, explaining its effect on the income statement is becoming important for many companies.
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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. Subsequently, one may also ask, what is considered an extraordinary item in accounting?Īn extraordinary item is an accounting term used to describe expenses that are infrequent, unusual and significant in size.Īdditionally, what is the difference between extraordinary items and exceptional items? An exceptional item should not be confused with an extraordinary item.
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Even though exceptional items are considered to be part of ordinary business charges, they must be disclosed due to their sheer size or frequency. An exceptional item is a charge incurred that must be noted on a company's balance sheet, in accordance with GAAP principles.