    

|
|
|
|
One Time Charge
|
A one time charge is a charge against earnings that is unusual in nature and not expected to reoccur. An example of a one time charge is the costs of closing a plant damaged by an earthquake. Unlike a one-time charge, normal expenses -- like cost of goods sold and SG&A -- are part and parcel of the regular, ongoing activities of the business. A one-time charge is distinguished from such normal expenses by presenting it as an extraordinary item on the income statement. Companies thus have a strong incentive to present expenses as a one time charge: If investors consider an item a one-time charge, they will discount it and exclude it from their earnings estimates for future periods. In this fashion, classifying an item as a one-time charge can increase EPS estimates and valuations. It's not surprising firms sometimes attempt to classify expenses that are part of their normal business activities and may indeed reoccur – such as an inventory write-downs -- as a one-time charge. Note that a one-time charge is also called a nonrecurring charge.
Rate this one time charge definition...
|
|
Where is the market headed? The answer may surprise you. Find out right now with the exclusive & Barron's recommended charts of Chart of the Day.
|
Popular Terms: EBITDA, liquidity ratio, 401a, deferred tax, command economy, 144a, per diem, margin rate, deferred revenue, required rate of return, cancelled check, open position, stock split, ex-dividend, implied volatility, in escrow, irrevocable trust, limit order, quality assurance, risk management, 1035 exchange, Key Rate Duration, class C shares, current ratio, Zero Cost Collar, 1031 exchange, wholly-owned subsidiary, VIX, reverse mortgage, retained earnings, phantom income, option premium, minority interest, labor relations, ex-dividend date, covered put, real GDP, LIBOR, inflation, dividends payable, diluted share, debt service coverage, balance sheet, APR, equities, average price per share, FICO score, FTSE, stock market close
|
|
|
|