Special Items:

1. Extraordinary items - Extraordinary items may be defined as material events and transactions distinguished by their unusual nature and by the infrequency of their occurrence. Extraordinary income or expenses in a particular period should be separately stated in the statement of profit and loss in a manner that its impact on current profit or loss can be perceived. Examples include a major casualty such as fire; prohibition under a newly enacted law, etc. These items net of their tax should be shown separately.

2. Prior period items - The term refers to expenses and incomes which arise in the current period as a result of errors or omissions in the preparation of financial statements of one or more periods. Errors may occur as a result of mathematical mistakes, mistakes in applying accounting policies, misinterpretation of facts, or oversight. Prior period items may be disclosed separately to ascertain the effect of such transactions on the profit/loss for the period.

In the Vertical form of Profit and Loss Account appropriations are shown at the bottom of the Profit and Loss Account. Details of the appropriations made from the profits in respect of preference dividend, interim and final equity dividends and transfer to reserves, etc. are shown. 

The balance in the Profit and Loss Appropriation Account, if any is taken to the liability side of the balance sheet under the heading 'Reserves and Surplus'. If there is some short fall (very rare) in Profit and Loss Appropriation Account (that is, a loss), then the shortfall is shown on the Asset side under the heading 'Miscellaneous Expenditure'.

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