Does it classify as a extraordinary item

Does it classify as a extraordinary item

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We over paid our workers comp expense by 40,000 and we may only recoop 20,000.

Can we report 20,000.00 as an extraordinary item
Carolyn Thompson

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By AnonymousUser
16th Aug 2002 13:50

FRS 3 makes extraordinary items very rare
FRS 3 effectively got rid of extraordinary items. When I was taught this, the example given for an extraodinary was Aliens landing on earth is an extraordinary item. All other items are exceptional if they are deemd outside of the normal business events and of a material nature.

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By User deleted
13th Jul 2002 11:37

Exceptional items are defined very broadly, and an item cannot be extraordinary if it is exceptional. See FRS3.

It seems Extraordinary items only exist because the Companies Act says they do.

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By neileg
15th Jul 2002 09:23

When I were a lad...
...we learnt that exceptional items were those that derived for normal trading activities but that by virtue of size or timing distorted the trading account. Thus a true and fair view was only possible by taking these into account.

An extraordinary item was one that arose from outside normal trading activities, but that should still produce an entry in the profit and loss account.

In either case, the amounts have to be material.

Of course this was long before FRS or SORPs were thought of. In fact, SSAPS had only just got into double figures. Ah, those were the days. 16 column cash, purple audit pencils...

I would have thought that this item was exceptional. Is £20k material in the accounts, though?

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