Lesson: Unusual Gains and Losses

In this lesson, Nick Palazzolo, CPA, demystifies the treatment of unusual gains and losses in financial reporting. He explains that such items, due to their nature of being rare or unexpected––like a warehouse fire or hurricane damage––should not be hidden within the normal operations of the income statement but rather disclosed separately. With a clear and practical approach, Nick outlines the appropriate reporting methods, stressing the importance of full disclosure. Watch as he skillfully changes the ‘ors’ to ‘ands’ to emphasize that inclusion in the income statement, notes to the financial statements, and the Management Discussion and Analysis section is not just best practice but likely required for material events, driving home the mantra that more disclosure is typically better on the exam.