Above-the-line refers to items that appear before operating profit in the income statement.

It usually includes:

Sales (Revenue)

Cost of Goods Sold

Gross Profit

Operating Expenses

These items are part of the company’s main business operations.

Anything recorded below operating profit (like interest and taxes) is called below-the-line.

In simple terms, above-the-line items are regular operating incomes and expenses shown before profit from operations is calculated.