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Extraordinary Items

Just to shed more light on this case, extraordinary items are events and transactions that meet two conditions: They are unusual in nature and infrequent in occurrence. To be considered unusual, the item should be abnormal and only incidentally related to the customary activities of the entity. To be regarded as infrequent, the event or transaction should not be reasonably expected to recur in the foreseeable future. A company must evaluate both criteria in terms of the environment in which it operates. Thus, Weyerhaeuser Co. reported the $36 million in damages to its timberland caused by the eruption of Mount St. Helens as an extraordinary item because the event was both unusual and infrequent. In contrast, Florida Citrus Company does…