In accounting, a non-recurring item is an infrequent or abnormal gain or loss/ charge that is reported on an entity’s financial statements. Non-recurring items do not arise from the normal operations/ activities.

As an item reflecting charges or losses, a non-recurring item belongs to a category of charges/ expenses that do not directly relate to core operations/ activities. These charges arise from non-recurring events that give rise to non-recurring charges or other charges with similar nature such as write-off. One-time charges do not reflect long-term financial performance, and hence operating earnings do not correspond to such charges.

These charges do not qualify as operating expenses, given their disconnection with an entity’s core operations. By nature, these costs are non-recurring (and hence, they are also called one-time charges or non-operating expenses).

Examples of non-recurring charges include legal costs (payments to settle lawsuits), finance costs (interest payments on debt to creditors/ lenders), restructuring costs, inventory write-offs, and any one-time deductions (in miscellaneous income deductions) in the income statement.

As a general rule, material amounts included under miscellaneous income deductions are separately presented in the income statement or in a footnote, properly disclosing the nature of the transactions out of which such expenses arise.

Non-recurring charges may be combined with non-operating income as long as the individual amounts involved are not significant. However, interest expense and amortization of debt discount are presented on the face of the income statement.