In 2015, the Financial Accounting Standards Board (FASB) issued an ASU that eliminated the presentation of extraordinary items in income statements. The ASU has been in effect since 2016, but, in practice, we’re seeing that many entities are unaware of this ASU.
In short, ASU 2015-01 removes the need for entities to consider whether financial transactions and events are “extraordinary” in nature, generally defined by being both “unusual” and “infrequent.” What has not changed, however, is the need to assess whether financial transactions and events are individually unusual and/or infrequent in nature, which could give rise to separate presentations as part of operating income, or as additional narrative disclosures.
As mentioned, this standard is currently in place and should be followed. If this affects you, please reach out to us and we’ll guide you through the implementation process.