Gaap Income Statement Items

Organizations that follow these principles can assure investors of a certain amount of consistency which can make it easier to weigh investment options.

Gaap income statement items. The general accepted accounting principles gaap income statement is a financial report prepared in accordance with guidelines set by the financial accounting standards board fasb. Gaap and ifrs are the two major financial reporting methods. However there is flexibility in terms of adding line items using non gaap financial measures and formatting options. Here we discuss income statement examples using ifrs gaap accounting and also the single step and multi step income statement.

Also extraordinary items under gaap can now be given more specific names such as loss from fire at factory gaap specifically noted that gain loss write offs and write downs on following items must not be treated as extraordinary items. Income statement states the financial health of the organization. Most income statement items are consistently presented with little or no ambiguity as to their terminology or order. Exhibit 2 displays the key line items on the income statement.

Gaap prescribes that income from continuing operations will be an all inclusive number and has avoided the complexity of prescribing disclosure of operating nonoperating unusual abnormal and nonrecurring items affecting income as discussed in the dissents to apb 30 1973. An extraordinary item was a gain or loss from unusual events previously identified on a company s income statement. This article has been a guide to income statement examples. Income statement presentation the takeaway.