Final answer:
Historically, an item on the income statement was classified as extraordinary if it was unusual in nature, infrequent in occurrence, significant, and material enough to impact the financial statements.
Step-by-step explanation:
Conditions for an Item to be Classified as "Extraordinary"
On the income statement, an item is classified as extraordinary if it meets four specific conditions. The Financial Accounting Standards Board (FASB), which sets accounting standards in the United States, previously identified these conditions for an item to be considered extraordinary. However, it's important to note that FASB has eliminated the extraordinary items classification in its accounting standards updates. For educational purposes, the historical conditions required an extraordinary item to be both unusual in nature and infrequent in occurrence. Additionally, the event or transaction should be significant and separate from the ordinary activities of the business. It must also be material enough to have an impact on the financial statements to warrant separate disclosure.