An extraordinary item is a material event that can affect the financial statements negatively. This event has to be considered both an infrequent and unusual event to be considered an 'extraordinary item'. A common example of natural disasters is hurricanes, floods, earthquakes, etc. in areas where these disasters do not normally occur. They are shown on the income statement after "discontinued operations" and shown net of tax.
Under IFRS, extraordinary items do not exist and all losses and gains that result from natural disasters, earthquakes, floods, etc. are reported as losses and gains on the income statement from income from operations segment.
Example:
Adequate Disclosure, Inc. incurs damage to its corporate building due to a hurricane that is considered to be unusual and infrequent. The damage is estimated to be $19,000. Adequate Disclosure, Inc. tax rate is 35%. How much of this damage is reported on the income statement?
$19,000 x 35% = $6,650
$19,000 – $6,650 = $12,350 is reported on the income statement