Extraord. & Accounting Changes is a line item on the income statement that shows the net effect of any extraordinary items and accounting changes on the net income of the company. Extraordinary items are gains or losses that are not related to the normal business operations of the company, are infrequent and unusual in nature, and are unlikely to happen again in the foreseeable future. Accounting changes are adjustments made to the accounting policies, estimates, or methods of a company that affect its financial reporting. Both extraordinary items and accounting changes are reported net of tax and disclosed separately in the financial statements to provide more clarity and transparency to the users. However, as of January 2015, GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards) do not recognize the concept of extraordinary items and require companies to present them as part of their ordinary income or expenses.