Learn something new every day
More Info... by email
Also known as a nonrecurring item, a nonrecurring charge is a posting within the accounting books that documents a charge or expense that is considered to be a one-time event, and is not scheduled to recur in the foreseeable future. Typically logged as part of a corporation’s operating expenses, a nonrecurring charge may have to do with an expense that arose from an event that was out of the ordinary, or even the need to purchase goods for use in the expansion of the company, such as outfitting a newly opened sales office. The primary characteristic of this type of charge entry is that the expense is not expected to be repeated any time soon and in fact may never be incurred a second time, even after a number of years have passed.
There are a number of examples that illustrate the nature of a non-recurring charge. One of the more common is the purchase of some type of good that will be used indefinitely in the course of business. For example, if a local business chooses to purchase a calculator for use in the accounting department, the charge is considered to be nonrecurring. There is the anticipation that the calculator will last for an indefinite number of years before there is a need to replace the item, meaning there is no need to budget for a replacement from one accounting period to the next.
Other examples of a nonrecurring charge have to do with one-time expenses that are highly unlikely to recur on some sort of ongoing schedule. The costs of moving a business operation from one location to another site are a prime example. The cost of repairs to a plant facility after a natural disaster is also usually classed as a nonrecurring charge. Charges of this type are considered one-time in nature, since the likelihood of moving the operation again in the near future is extremely low. In like manner, charges related to settling a lawsuit are considered nonrecurring, since there is not much chance that the suit will be re-instituted and require additional resources to settle.
A nonrecurring charge can relate to just about any facet of the business operation. The common thread that runs through all these types of charges is that there are no plans to repeat those expenses in the future. This is different from recurring charges, which are expenses that are anticipated to recur on a consistent basis, such as monthly utility bills or regular shipments of raw materials that are required to manufacture the goods or services produced and sold by the company.
One of our editors will review your suggestion and make changes if warranted. Note that depending on the number of suggestions we receive, this can take anywhere from a few hours to a few days. Thank you for helping to improve wiseGEEK!