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Basic Question 2 of 13
Which one of the following is a one-time item that analysts should remove from financial statements to understand normal operations?
B. Restructuring charges
C. Income tax expense
A. Interest expense
B. Restructuring charges
C. Income tax expense
User Contributed Comments 5
| User | Comment |
|---|---|
| cfairs | Restructuring charges are part of 'Unusual or infrequent' non-recurring category |
| Vikku | They are NOT part of continuing operations, so reported as a single line item on income statement & appear "above the line (as pre tax)." |
| Shaan23 | In the text it says - Under GAAP - Items that are unusual or infrequent are shown as part of a companies continuing operations. For eg. Restructuring charges such as costs to close plants are considered a part of ordinary activities. Whats going on? |
| gill15 | it just means as an analyst you "should" remove them from income from normal operations, although GAAP allows them. |
| adidasler | think the idea here is that it is not a recurring expense ... so to see how the company normally operates .. you need to take that since it doesnt happen every year |
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Learning Outcome Statements
describe the financial reporting treatment and analysis of non-recurring items (including discontinued operations, unusual or infrequent items) and changes in accounting policies
CFA® 2025 Level I Curriculum, Volume 2, Module 2.