Exceptional Items (Income Statement)

Explanation: Exceptional Items, also known as extraordinary items, refer to significant gains or losses that arise from transactions or events outside of a company’s ordinary course of business. These items are usually infrequent in occurrence and have a material impact on a company’s financial results. Exceptional items are typically disclosed separately in a company’s income statement to provide clarity on their nature and to distinguish them from regular operating activities.

Example: TCS had exceptional items of -958 crore as of TTM Dec 23. This indicates that TCS incurred exceptional expenses amounting to 958 crore during the trailing twelve months ending in December 2023. Exceptional items can include one-time charges such as restructuring costs, asset impairments, litigation settlements, or gains/losses from the sale of assets. By disclosing exceptional items separately, companies ensure that investors are aware of the extraordinary nature of these transactions and can assess their impact on the company’s financial performance accurately.