Extraordinary items are unusual and infrequent items reported below the line net of taxes. “Below the line” means after net income from continuing operations but before net income.
- Discontinued operations are reported below the line net of taxes.
- Unusual or infrequent items are unusual or infrequent, but not both. They appear (a separate line item) as a component of net income from continuing operations that must be removed if not deemed to be a component of persistent income. They are reported above the line before taxes.
- Changes in accounting principle are reported below the line net of taxes.
- Accounting errors go directly to retained earnings.
