Final answer:
An extraordinary item under U.S. GAAP was an event that was unusual in nature and infrequent in occurrence, significantly distinct from the business's ordinary activities. It was presented separately in financial statements for clearer comparison over periods. However, the classification no longer applies due to FASB updates.
Step-by-step explanation:
Under U.S. GAAP, an extraordinary item is both unusual in nature and infrequent in occurrence. This means that for an item to be classified as extraordinary, it must be unusually significant and not expected to recur in the foreseeable future. These events are considered to be outside the ordinary activities of the business and are separated out on the income statement to allow users to more easily compare results from one period to another, without these irregular events skewing the analysis. It is worth noting that the concept of extraordinary items under GAAP has been eliminated for periods beginning after December 15, 2015, due to the Financial Accounting Standards Board (FASB) updates to simplify income statement presentation by eliminating the extraordinary classification.