Financial Analysis

Financial Analysis

Problem 1

Explain why the company may classify this as an extra ordinary charge.

In accounting, extra ordinary charges are those that are unforeseen and infrequent. They are accounted in a separate heading, so they do not make any distortion in the firm's expected income. Thus, they are recorded as the extra ordinary charge and later it is briefed in the 'notes to the financial statement' (Tracy, n.d).

Therefore, installation of the safety equipment was not foreseen and it was a onetime cost that company had to bear, but however, company certainly did not want its regular earnings to get ...