Non-Recurring Items and Non-Operating Items
Certain portions of this video is marked as prerequisite. Please look out for the sign “PRE” which will appear at the bottom left of the video. While you won’t be directly tested on prerequisites in the exam, it’s assumed you’ve gained this knowledge or skill during your university studies. We strongly recommend reviewing the prerequisite portions as well, as the content may be essential for understanding subsequent parts of the curriculum.
The portion on “non-operating items” is prerequisite
Terms covered: Non-recurring items, Discontinued operations, Extraordinary items, Unusual or infrequent items, Operating activities, Operating items, Non-operating items
Non-Recurring Item Classifier
Drag each financial event from the left to its correct category on the right.
Financial Events (Drag these)
Categories (Drop here)
Discontinued Operations
Operations the company has decided to dispose of and are distinct from the rest of the firm.
Extraordinary Items
Historically: unusual AND infrequent. (Note: Classification is prohibited under IFRS and largely eliminated under US GAAP after Dec 2015).
Unusual or Infrequent Items
Unusual in nature OR infrequent in occurrence, but not both. Reported pre-tax as part of income from continuing operations.
Accounting Changes
Includes changes in accounting principles (e.g., LIFO to FIFO) or estimates (e.g., asset useful life).
