Gains and Losses

It would probably be ideal if business and private life was as simple as producing goods, sales and record profits. But there are often circumstances that disrupt the cycle, and part of the work report of the auditors as well. Changes in business climate or the cost of the goods or any number of things can lead to exceptional or extraordinary gains and losses in business. There are things that the profit and loss account is to influence the reduction or restructuring part of the company. It was a rare thing in business, but now it is quite common. It is usually done in order to compensate for losses in other areas and reduce the cost of salaries and benefits. However, there are costs associated with these and severance pay, investment services and expenses.

In other cases, an enterprise may decide to discontinue certain product lines. Western Union, for example, recently delivered its last telegram. The type of communication is so drastically, with e-mail, mobile phone and other forms of change that telegrams are obsolete. If you do not have enough to sell a product with a gain high enough that cost is worthwhile, then it is time to change its product range.

Litigation and other legal actions can cause extraordinary losses or gains as well. If you win damages in a lawsuit against the other, you've made extraordinary gains. And if your own legal fees and damages and penalties are too high, they can have a significant impact on the profit and loss account.

Sometimes a company's accounting methods or the need for the mistakes that were correct in previous years reports. Generally Accepted Accounting Procedures (GAAP) require companies to make a one-time losses or gains very visible in his tax return.