Why this is mistaken
Classify the transaction from the entity's major or central activities and the applicable transaction guidance. Forecast recurrence separately from past results, management's current plan, the assets involved, and changes in the entity's activities. A net gain can recur, and a gross revenue stream can end. Neither presentation supplies a forecast by itself.
Where to watch
When this mistake may appear
- An asset sale is reported as a gain.
- An analyst removes every item below operating income from forecast earnings.
Check your work
Your work may contain this mistake if:
- Uses net presentation as proof that the item will not recur.
- Ignores a repeated disposal program.
- Calls all financing and peripheral items one-time.