In accounting, losses are a component of an entity’s income that may, or may not, arise in the ordinary course of business/ activities (core activities). However, losses represent other income items that result from economic resources available to an entity. Examples of losses include sales/ disposal of fixed assets/ long-term assets or broadly non-current assets. Losses reflect a decrease or deterioration in economic resources. Losses may, or may not, arise in the normal course of business/ activities.

Losses may also encompass paper losses (unrealized losses) which arise, for example, on the revaluation of marketable securities or from decreases in the carrying amount of long-term assets. For presentation purposes, such losses are typically depicted as a separate set of items on the statement of income (SOI) of an entity, rather than as a deduction from revenues. Separation of operational losses and non-operational losses helps the user of financial statements make more educated decisions in relation to their relationship with an entity.