what is an unusual item 
an unusual item is a nonrecurring or one time gain or loss that is not considered part of normal business operations unusual gains or losses may be recorded on the income statement as a separate component of income from continuing operations or alternatively may be identified in the footnotes to the financial statements or the management discussion and analysis md a section of the annual report understanding unusual itemsreporting unusual items separately is important to ensure the transparency of financial reporting because unusual items are unlikely to recur separating these items either explicitly on an income statement or in the management discussion and analysis md a or footnotes allows investors to better assess the income generating capacity of the core business activities unusual items may include the financial accounting standards board fasb the independent nonprofit organization responsible for issuing generally accepted accounting principles gaap has given management leeway to provide a more descriptive separate line item on the income statement when appropriate such as loss from hurricane damages to office building special considerationsthe treatment of unusual items has several implications related to the analysis of company performance and valuation of its shares credit agreements and executive compensation schemes an analyst would have to make adjustments to the income statement to produce a clean ebit ebitda and net income figures on which to calculate price multiples debt agreements would have to specify the exclusions to how certain covenants are calculated executive pay plans too would need to explain how unusual items are handled in compensation formulas 