Which financial statement section typically includes nonrecurring items?

The bottom section of a financial statement, often referred to as the bottom line or net income section, typically includes nonrecurring items. These items are unusual and infrequent in nature, such as gains or losses from the sale of assets, restructuring charges, or natural disaster impacts. Including these items in the bottom section allows analysts and users of financial statements to see how these occurrences affect the overall profitability of the company in that particular reporting period.

In contrast, operating sections focus on regular, ongoing revenue and expenses related to the core business activities. The cash flow section emphasizes the inflows and outflows of cash, detailing how money moves in and out of the business without specific regard to nonrecurring gains or losses. The equity section outlines owners’ equity accounts and does not typically present items related to day-to-day operations or nonrecurring events. Thus, the bottom section is the most appropriate place for reporting nonrecurring items, making it the correct choice in this context.