Nonrecurring Gain Or Loss

AAA

DEFINITION of 'Nonrecurring Gain Or Loss'

A one-time or highly infrequent profit or loss. One-time gains or losses are reported separately in a coporation's income statement - net of income taxes - and are not shown to affect earnings per share (EPS).

Also referred to as "extraordinary charges" for accounting purposes.

INVESTOPEDIA EXPLAINS 'Nonrecurring Gain Or Loss'

Capital gains from the sale of land or casualty losses are items that are often seen as nonrecurring gains and losses. Write-offs or write-downs relating to normal business expenses (i.e. inventory) are not be considered nonrecurring losses unless they are due to one-time events, such as a natural disaster.

Investors need to carefully examine a company's financial statements to see what types of nonrecurring gains and/or losses a holding posts and how frequently they engage in these types of transactions. While by their very nature nonrecurring gains and losses are meant to occur very infrequently, the reality is that companies often report these types of expenses.

RELATED TERMS
  1. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding ...
  2. Windfall Profits

    Huge profits that occur unexpectedly due to fortuitous circumstances. ...
  3. Capital Loss

    The loss incurred when a capital asset (investment or real estate) ...
  4. Gain

    An increase in the value of an asset or property. A gain arises ...
  5. Income Statement

    A financial statement that measures a company's financial performance ...
  6. Taxable Gain

    A profit on the sale of an asset that is subject to taxation. ...
Related Articles
  1. The Art Of Cutting Your Losses
    Active Trading Fundamentals

    The Art Of Cutting Your Losses

  2. Understanding Supply-Side Economics
    Economics

    Understanding Supply-Side Economics

  3. How And Why Do Companies Pay Dividends?
    Investing Basics

    How And Why Do Companies Pay Dividends?

  4. Basic Investment Objectives
    Options & Futures

    Basic Investment Objectives

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center