NonRecurring

Nonrecurring is an adjective used in finance and accounting to describe events, items, or revenues and expenses that are unlikely to occur again in the normal course of business. In financial reporting, nonrecurring items are distinguished from recurring items because they do not reflect ongoing operating performance.

Classification and disclosure: The determination of what qualifies as nonrecurring can be subjective and varies by jurisdiction and standard. Many reporting frameworks require or encourage disclosure of the nature, amount, and financial effect of such items, and some firms provide a separate line item or a management discussion note. Analysts often adjust for nonrecurring items when assessing ongoing profitability, sometimes using pro forma or non-GAAP measures, though these adjustments should be clearly defined.

Common examples: gains or losses from asset disposals, impairment charges, restructuring costs, legal settlements, fines, natural disasters, tax judgments, or one-time benefits such as a favorable tax settlement. Nonrecurring items can be positive or negative.

Limitations and use: Because the classification is not always clear-cut, there is potential for earnings management. Stakeholders should review accompanying disclosures to understand the nature and timing of the items and how they affect comparability across periods and companies.