Final answer:
The statement that companies always treat gains or losses from an involuntary conversion as extraordinary items is False. The Financial Accounting Standards Board eliminated the extraordinary items classification in 2015 and these are now included within income from continuing operations.
Step-by-step explanation:
The question asks whether companies always treat gains or losses from an involuntary conversion as extraordinary items. The answer is False. Under the accounting standards formerly used by the Financial Accounting Standards Board (FASB), specifically before the update to the Accounting Standards Codification (ASC), certain involuntary conversions might have been considered extraordinary. However, the FASB eliminated the concept of extraordinary items in 2015 with the issuance of ASU 2015-01, which means that these events are no longer separated from operating revenue and should be included within income from continuing operations. An involuntary conversion can occur when a company's property or assets are destroyed, stolen, condemned, or disposed of under the threat of condemnation, and often include events like natural disasters, expropriation, or theft.