irregular item

Examples of irregular item in the following topics:

• Reporting Irregular Items

  • Irregular items are reported separately from the income statement proper so that users can better predict future cash flows.
  • Irregular items, which are by definition unlikely to recur, are reported separately from the income statement proper so that users can better predict future cash flows.
  • Irregular items are reported net of taxes.
  • Discontinued operations are the most common type of irregular items and must be shown separately.
  • Differentiate among discontinued operations, extraordinary items, and changes in accounting principles

• Special Reporting

  • Irregular items require special reporting procedures, and include discontinued operations, extraordinary items, and the reporting of the resultant EPS.
  • Special, or irregular, items appear on single step or multi-step income statements, and require special reporting procedures.
  • Two examples of irregular items are discontinued operations and extraordinary expenses.
  • Discontinued operation is the most common type of irregular item.
  • Earnings per Share: If a company reports any irregular items on its income statement, then it must report earnings per share for those items.

• Preparation of the Income Statement

  • Discontinued operations is the most common type of irregular items.
  • Certain items must be disclosed separately in the notes (or the statement of comprehensive income), if material, including:
  • A company that reports any of the irregular items must also report EPS for these items either in the statement or in the notes.

• Accounting Perspectives on Long-Lived Assets

  • If accounting principles allow recognition of an asset, the next issue concerns which items can be included and which items need to be expensed.
  • Figuring the cost of an item takes into consideration more than just the purchase price.
  • Added to that would be any taxes paid, less any discounts received, cost of transportation that a company pays to bring the item to where it needs to go, and the cost of getting it ready for use.
  • Basically any costs that are necessary to get an item or land ready to use for business is included in the cost of the item.
  • Items spent to get the asset up and running is capitalized as part as the cost of the asset.

• Lower of Cost or Market

  • In lower of cost or market (LCM), inventory items are written down to market value when the market value is less than the cost of the items.
  • Under LCM, inventory items are written down to market value when the market value is less than the cost of the items.
  • Employees should check the stock of certain items to maintain an accurate record for dollars of inventory in stock .
  • Under the class method, a company applies LCM to the total cost and total market for each class of items compared.
  • Here a woman is checking stock of certain items to maintain an accurate record for dollars of inventory in stock.

• Financial Statement Notes

  • These notes help explain specific items in the financial statements.
  • The notes clarify individual line items on the various statements.
  • Any items within the financial statements that are valuated by estimation are part of the notes if a substantial difference exists between the amount of the estimate previously reported and the actual result.
  • Notes on the financial statements convey specific information about the line-items on the statement.

• The Disclosure Process

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• Reporting Receivables

  • Accounts receivable are reported as a line item on the balance sheet and in a more detailed again report.
  • Accounts receivable are reported as a line item on the balance sheet.

• Unearned and Deferred Revenues

  • A deferred item, in accrual accounting, is any account where a revenue or expense, recorded as an liability or asset, is not realized until a future date (accounting period) or until a transaction is completed.
  • Examples of deferred items include annuities, charges, taxes, income, etc.
  • If the deferred item relates to an expense (cash has been paid out), it is carried as an asset on the balance sheet.
  • If the deferred item relates to revenue (cash has been received), it is carried as a liability.
  • A deferred revenue item involves cash received before the earnings process is complete.

• Introduction to the Retained Earning Statement

  • Line items for the retained earnings statement typically include profits or losses from operations, dividends paid, issue or redemption of stock, and any other items charged or credited to retained earnings. .
  • Comprehensive income is the sum of net income and other items that must bypass the income statement because they have not been realized, including items like an unrealized holding gain or loss from available for sale securities and foreign currency translation gains or losses.
  • These items are not part of net income, yet are important enough to be included in comprehensive income, giving the user a bigger, more comprehensive picture of the organization as a whole.Items included in comprehensive income, but not net income are reported under the accumulated other comprehensive income section of shareholder's equity.