explain the exception in balance sheet
Answers
Answer:
Understanding the Exceptional Item
An extraordinary item on a balance sheet indicates a substantial gain or loss that is unlikely to be repeated. It is not part of the company's day-to-day business. It also must be "material." That is, it has a significant impact on the company's profit or loss for the relevant period
Explanation:
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Answer:
Understanding the Exceptional Item
An extraordinary item on a balance sheet indicates a substantial gain or loss that is unlikely to be repeated. It is not part of the company's day-to-day business. It also must be "material." That is, it has a significant impact on the company's profit or loss for the relevant period. What are Exceptional Items
As the name suggests, these are one-off events that either caused a great expense or a big bout of revenue. For example, suppose a company sold off some of its machinery because it did not use it anymore. This led to an income of Rs 1 crore – a big sum for a single transaction. This could easily boost the company’s profits in that particular quarter/year. However, this is not likely to recur again. So, it is counted as an ‘Exceptional Item’.