Nonoperating revenues are the amounts earned by a business which are outside of its main or central operations. Nonoperating revenues are also described as incidental or peripheral. A common example is a retailer’s investment income or interest income. The retailer’s main operations are purchasing and selling merchandise. Investing its idle cash in interest-bearing investments is outside of its main or central operations.
Gains often involve the disposal of property, plant and equipment for a cash amount that is greater than the carrying amount (or the book value) of the asset sold. An example would be a retailer’s disposal of a delivery truck for a cash amount that is greater than the truck’s carrying amount. Another example is a gain from a settlement of a lawsuit.
Nonoperating revenues and gains are often reported on the income statement after the subtotal Income from operations and will often appear with the caption Other income.
