Fundamental Glossary / Earnings & Accounting Concepts
One-Time Gains
Profits from events that are not part of the ongoing business, such as an asset sale or a legal settlement received.
Formula
Disclosed as exceptional or inside other income. They should be removed from the run-rate used in a valuation.
What it means
A one-time gain raises this year's profit and does not raise next year's earning power. Leaving it in the base makes every growth rate and every multiple look too kind.
The sale of a division is the clearest case. The cash is real. The profit should not be capitalised as if the division were still there.
How to read it
Strip the after-tax gain out of PAT before you compute a P/E or a growth rate. Keep the cash in the balance sheet, because the cash did arrive.
What to watch
Management may call a gain one-time and call a similar loss "operating." Apply the same test to both.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.