Let’s say you’re in the business of real estate and construction. Your 100M of annual revenue comes from selling new homes to individual buyers. You have 90M a year in expenses. Part of your costs include labor and supplies (wood)
How do you do the income statements (and cashflow) if a friend gives the company 1 million in free wood?
That amount would be listed in the income from continuing operarations before taxes (even though they are not (US GAAP takes another measure as it allows the reporting below the line net of taxes))
There are treated differently in US GAAP and IFRS.
US GAAP has included a proviision for Extraordinary items, which is reported net of tax. If the firm expects that the gift is unusual and infrequent then they would include it here.
IFRS has a unusual or infrequent item and it is reported before tax.