In the income statement for a public corporation, what does the term "restructuring charges" refer to?

Answer 1

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The term "restructuring charge" is not defined in the existing authoritative literature. While the events or transactions triggering the recognition of what are often identified as restructuring charges vary, these charges typically result from the consolidation and/or relocation of operations, or the disposition or abandonment of operations or productive assets. Restructuring charges may be incurred in connection with a business combination, a change in an enterprise's strategic plan, or a managerial response to declines in demand, increasing costs, or other environmental factors.

Some types of restructuring charges, such as "exit costs," as defined in Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring) (EITF 94-3), are recognized as liabilities and charged to operations when management commits to a restructuring plan, while other types of restructuring charges contemplated by the plan may not be recognized until they are actually incurred. The circumstances in which the intended actions of management result in the recognition of a liability are identified in either EITF 94-3 or EITF Issue No. 95-3, Recognition of Liabilities in Connection with a Purchase Business Combination (EITF 95-3), collectively referred to as the "Consensuses."

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Answer 2

Well, I'm not quite an accountant (a year shy) but it's the fees involved if the corp. was restructured, (financially and professionally rearranged) which is a formal changing of the company to avoid bankruptcy, usually. There are certain expenses that are involved: attorney's fees, filing fees, mgmt fees, mediation cost... many things, but more importantly, i believe if there are charges listed, it means the company was restructured within the last fiscal year or are still paying off the fees from a recent restructuring, which would imply to me a lack of stability... I hope this helped.

Answer 3

Here's a fact sheet on restructuring charges: http://www.sec.gov/news/extra/sab100f.htm


Equity analysts view these charges as one-time events that should be disengaged from earnings to create a picture of how a company's ongoing operations are performing. Credit analysts and lenders have a different perspective. Focused on cash flow, lenders, for example, scrutinize rather than isolate charges to ferret out cash portions that choke cash flow.

Answer 4

It refers to a corporation altering their capital structure and the associated charges or expenses that were incurred as a result.

Answer 5

Here: