Answer to Question #5657 in Finance for LaMarcus Streeter

Question

Each of the following is an extraordinary item except?

losses attributable to labor strikes.

effects of major casualties, if rare in the area.

expropriation of property by a foreign government.

effects of a newly enacted law or regulation.

Answer 1

An extraordinary item except is expropriation of property by a foreign government. The category extraordinary item means non reccuring event that
materially affects the financial results of the entity for the reporting period.
The event is extraordinary in the case of having next characteristics: appears
very rarely; isn't a part of daily business activity of the entity; doesn't
depend on the decisions of management or owners. So losses attributable to labor
strikes, effects of major casualties, if rare in the area and effects of a newly
enacted law or regulation are extraordinary because these actions meet
requirements of being extraordinary. Contrariwise the expropriation of property
by a foreign government is always involuntary act from the company's side, but sometimes it may be accompanied by some form of compensation. If the amount of compensation is suit the owners of expropriated property, then the capture will already be made ​​on voluntary basis and doesn't constitute expropriation.