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Q4-3IFRS

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Intermediate Accounting (Kieso)
Found in: Page 198

Short Answer

Bradshaw Company experienced a loss that was deemed to be both unusual in nature and infrequent in occurrence. How should Bradshaw report this item in accordance with IFRS?

Under IFRS, extraordinary items should be reported separately.

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Step by Step Solution

Meaning of Extraordinary Items

In accounting, the term extraordinary items denote the non-recurring and abnormal gains and losses associated with a business entity. It also includes the revenues and expenses that are non-operating.

Reporting of extraordinary items under IFRS

The IFRS does not disclose the unusual and infrequent events as extraordinary items. IFRS requires separate disclosure for extraordinary items. Such information can either be reported on the face of the income statement or in the notes section linked with the income statement of a business concern.

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