Reports What Are Extraordinary Gains, Losses and Writeoffs?

Extraordinary gains and losses are financial effects from one-time or non-recurring events or activities which are outside of the core business of the firm.

For a sensor company, that would be anything not directly related to the ongoing business of designing, manufacturing, and selling sensors.

In the simulation extraordinary events include the gain or loss on the premature retirement of a bond, the sale of plant and equipment, and the liquidation of inventory.

Some things which might be extraordinary for one firm may be ordinary for another. For example, a financial firm which retires a bond might take an ordinary investment gain, or a salvage firm which sells depreciated equipment might take an ordinary gain on liquidating inventory.

Extraordinary gains and losses are contrasted to operating profits. Operating profits are derived directly from the business in which the company is engaged. For example, when participants late in the game sell plant at $0.65 on the dollar they can take a gain on the sale because the sale price is greater than the depreciated value of the asset; but this is an extraordinary gain which boosts their "booked" profits but which the Balanced Scorecard distinguishes from operating profits. An investor will discount extraordinary gains because they do not expect them to reoccur in the ordinary course of business.