Legal Definitions - exceptional charge

An exceptional charge is a type of expense that is not considered a normal cost of doing business. It is also known as a special charge or one-time charge. This type of expense is excluded from income calculations because it does not meet the Generally Accepted Accounting Principles (GAAP) test for extraordinary items.

For example, if a company has to pay a large settlement in a lawsuit, this would be considered an exceptional charge. It is not a normal cost of doing business and is not expected to occur regularly. Another example would be if a company had to write off a large amount of inventory due to damage or obsolescence.

These examples illustrate how exceptional charges are expenses that are not part of a company's regular operations. They are one-time events that can significantly impact a company's financial statements.