How is Extraordinary Items categorized in financial statements?

Extraordinary items are categorized as highly unusual transactions due to their nature and infrequency. These items represent events or transactions that are both unusual and not expected to occur regularly in a company's operations. By classifying them in this manner, financial statements provide users with the information needed to understand the potential impact of these items on the overall financial performance and position of the business.

In the context of financial statement analysis, labeling transactions as extraordinary items enables analysts and investors to assess the underlying operational performance of the company separately from these unusual occurrences. This differentiation helps in making more informed decisions regarding the company's sustainability and ongoing financial health.

The other options do not accurately reflect the nature of extraordinary items: they are not considered regular operating items or routine expenses, as these typically consist of day-to-day business activities that occur on a regular basis. Additionally, extraordinary items are not classified as current liabilities, which represent obligations that a company needs to settle within a year and are related to normal business operations rather than unusual or infrequent events.