Gain or loss on sale of an asset is the difference between what you receive in exchange for selling the asset and its original cost. Companies report this gain or loss on the income statement to show profitability. For example, if a company originally purchased an asset for $50,000 and then sold it for $45,000, you would record a gain or loss of $5,000. This can help companies quickly assess their ability to generate a return on their investments. Knowing when and how to strategically sell an asset is an important part of running a successful business.