The financial accounting term unusual gains or losses refers to line items appearing on a company's income statement that are unusual or occur infrequently. These are costs or revenues that would materially affect the company's financial statement, and are considered part of the company's normal business operation.
To help readers of financial statements to better understand a company's quality of earnings, accountants separate these expenses or revenues into several categories of irregular items. While extraordinary items must be both unusual and infrequent, unusual gains and losses will only satisfy one of these criteria. This is why the above definition is very similar to that of extraordinary items.
Unusual gains and losses are normally explained in the notes to the company's financial statements and appear in the income statement before extraordinary items. If not material in nature, these events should not appear as a separate line item. Non-material items should be combined with standard income statement line items such as revenues or operating expenses. If material in nature, unusual gains or losses should be reported separately, appearing above extraordinary items, and should not be reported net of income taxes.
Examples of unusual gains or losses include costs associated with labor disputes, write off of receivables, and gains or losses associated with the exchange of foreign currency or the sale of assets.