Gains and losses are shown separately on the income statement to communicate the expectation that they are nonrecurring.

Question

Quizplus · Accepted Answer

Gains and losses are usually nonrecurring events and are typically shown separately on an income statement to help communicate this fact to investors and analysts. By separating gains and losses from more consistent sources of income or expenses, analysts can better assess a company's ongoing financial performance without being misled by one-time events.

Gains and Losses Are Shown Separately on the Income Statement