what is a one time item 
a one time item is a gain loss or expense on the income statement that is nonrecurring in nature and therefore not considered part of a company s ongoing business operations to get an accurate gauge of a company s operating performance one time items are usually excluded by analysts and investors while evaluating a company although many one time items hurt earnings or profit there are one time items that add to earnings in the reporting period understanding one time itemsone time items are either recorded under operating expenses or below earnings before interest and taxes ebit ebit is essentially a company s profit without the cost of interest on debt and taxes factored into it net income on the other hand is the company s profit after factoring in all costs expenses and revenues and is listed at the bottom of the income statement a one time item such as the sale of an asset could inflate net income for that period one time items are also called unusual items or nonrecurring items types of one time itemsone time items listed on a company s financial statements may include explaining one time itemsa company could list a one time item separately on its income statement particularly if it s self explanatory however many publicly traded companies that report their financial performance on a quarterly and annual basis publish consolidated financial statements these consolidated statements contain the aggregate financial performance for a corporation that owns multiple companies subsidiaries divisions or businesses the aggregated figures make it easier for the company to report their revenue expenses and profit however it s up to investors and analysts to investigate what s behind those aggregated figures as a result the one items might not be listed separately on a consolidated income statement instead the company might group several items into a consolidated line item such as other income if the one time items were gains a separate consolidated line for nonrecurring charges could also be listed however there is usually a footnote number next to these line items on the income statement which refers to a more in depth explanation of the gains or losses in the footnotes section the footnotes are found in the management discussion and analysis md a section of the company s quarterly or annual financial reports benefits of one time itemsreporting one time items separately is important to ensure the transparency of financial reporting one time items help investors and analysts separate any charges or gains that are not part of the core operating revenue for the company one time items are the gains and losses that management does not expect to reoccur so segregating these items explicitly on the income statement or in the md a section allows for a better assessment of the continuing income generating capacity of the business listing one time nonrecurring items helps investors analysts and creditors with the analysis of a company s financial performance banks that lend to corporations would want to know how much of the company s revenue is being generated from its core business operations credit covenants issued by banks are frequently used to ensure that companies meet certain thresholds and financial requirements one time items can skew a company s earnings and revenue positively or negatively bankers must separate these nonrecurring items to properly calculate whether the company is meeting its covenants for example if a company sells cars and has a large one time gain for selling equipment analysts and creditors would need to strip out that one time gain and recalculate the company s net income or ebit although management will flag certain one time items whether an analyst or investor believes they are truly one time or not is a different matter for example companies in the oil and gas industry frequently sell assets to generate cash when oil prices are low these one time gains would increase earnings but if the company continuously sells assets or investments to raise cash they re essentially part of how the company does business of course investors must draw their own conclusions as to whether a company that has frequent one time items such as gains from the sale of assets is being managed properly or perhaps is in financial trouble real world example of a one time itemgeneral electric corporation ge owns several companies and subsidiaries and is involved in various industries including aviation healthcare and renewable energy 1 below is a portion of the income statement from ge s 10 q quarterly financial report for q1 2020 2 ge has restructured the company in recent years and in doing so has sold off some of its businesses a separate line item showing an income adjustment for the quarter is highlighted in blue on the income statement below the entry for other income on the income statement is explained in the notes section near the end of the quarterly financial report note 23 is listed below 4 nonrecurring or one time items may be listed as a separate line item however as shown above with ge one time items can be grouped into other line items since one time items can skew a company s financial performance it s important that investors dig through the footnotes section of a company s financial statements and investigate what s behind those one time items 