These are the result of currency revaluations or devaluations and do not appear on the face of the income statement. These currency fluctuations force firms to assume non-recurring charges or gains. An example is the $12 million Tesla gained in 2013 when the Yen’s plunge reduced Tesla’s Yen-denominated liabilities. David Trainer, the CEO and founder of New Constructs, notes that,
The Bolivar Fuerte was adopted as the national currency of Venezuela in 2008. Companies operating in Venezuela must obtain government approval to exchange Bolivars to US Dollars at the official exchange rate. Effective January 1, 2011, the Venezuelan government established a fixed rate of 4.30 per dollar. Again, effective February 13, 2013 the currency was further devalued to a rate of 6.30 per dollar. This change caused many companies to take large charges on the remeasurement of their Venezuelan operations for their 2013 fiscal years. Such a charge is a one-time, non-operating expense and is not indicative of the operations of the company.
“NOPAT Adjustment: Foreign Exchange Loss“, David Trainer
These non-recurring charges are added back to net income in order to arrive at a truer reflection of NOPAT.