An extraordinary item can be a gain or a loss, but it must have all of the following characteristics:

  1. unusual in nature, and

  2. infrequent in occurrence, and

  3. significant in amount.

As a result of this requirement, extraordinary items are very rare. Recent issues of Accounting Trends & Techniques published by the AICPA showed that of the 500 financial reports surveyed in each year there were usually less than four companies reporting extraordinary items.