BC407 Many entities disclose information about unusual (or similarly described) income and expenses. However, the way in which entities provide that information varies significantly and it is often unclear how or why items are identified as unusual. Stakeholders, especially users of financial statements, suggested that the IASB:

(a) define 'unusual income and expenses' and provide principles for identifying items as unusual to help an entity identify its unusual income and expenses and reduce opportunistic classification of items as unusual; and

(b) specify requirements for what information should be disclosed about such income and expenses, to increase the relevance and completeness of information provided about those items.

BC408 In response to this feedback, the IASB developed a proposed definition of 'unusual income and expenses' and proposed disclosure requirements. The objective of the proposed definition was to help users of financial statements identify income and expenses that might not persist so that those income and expenses could be analysed separately when predicting an entity's future cash flows. The IASB proposed defining 'unusual income and expenses' in the Exposure Draft as 'income and expenses with limited predictive value. Income and expenses have limited predictive value when it is reasonable to expect that income or expenses that are similar in type and amount will not arise for several future annual reporting periods.'

BC409 Most stakeholders agreed that the IASB should define 'unusual income and expenses'. However, most stakeholders disagreed with the proposed definition because of concerns about: