What is the difference between gain and revenue?


Quick Answer

The primary difference between revenue and gains is that revenue is money generated through primary business activities, whereas gains are achieved through peripheral business activities. The difference between the sale price of an asset and its present book value is an example of a gain.

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Full Answer

Another key distinction is that revenue covers money that comes into the business but expenses must be removed before the final profit is recognized. In contrast, a gain is more similar to a profit in that both the money generated and the cost have already been addressed in the calculation. With revenue, the business must subtract costs involved in generating the revenue to identify the profit.

An additional difference is that revenue normally results from ongoing business activities, such as the sale of goods and services. In contrast, a gain is often the result of a single event or process. As an example, a hardware store reports revenue every quarter that results from the sale of various goods that it sells. It may have gains that it realizes in some quarters but not others. In addition to disposal of an asset, gains may result from money generated from a lawsuit or through investment activities. Gains can affect the bottom-line profit, but ongoing revenue is essential to effective operations.

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