One-Time Charge
A one-time charge is a non-recurring expense that a company incurs, typically related to events such as restructuring, asset write-downs, or legal settlements. These charges are not part of a company's regular operations and are reported separately to provide a clearer picture of ongoing profitability. One-time charges can significantly impact a company’s financial results in the short term but are not considered reflective of its long-term performance.
Example
A technology company reports a $10 million one-time charge related to the settlement of a lawsuit, which reduces its net income for the quarter but doesn’t affect future profitability.
Key points
• A non-recurring expense incurred due to events like restructuring or legal settlements.
• Reported separately from regular operating expenses to avoid distorting long-term financial performance.
• Can significantly impact short-term financial results.
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