Income Statement Finance Costs

Finance costs from bank borrowings and interest income include respectively the cost and income related to balances held in the group s cash pool.

Income statement finance costs. Finance costs are also known as financing costs and borrowing costs. In this section we focus our attention on how this accounting is carried out in the balance sheet and income statement. Unwinding of discount on the contingent and deferred considerations amounting to 4 070 is included in other finance costs. The production process gives rise to many costs that do not exist in a merchandising company and some how these costs must be accounted for on the manufacturing company s financial statements.

You ve presented your operating results the very core results of your business and everything supporting it and now you show what s the extra bit you do with your funds. The cost of goods sold on the income statement is calculated using the per unit cost of 11 25 which consists of 1 40 per unit for direct materials 7 00 per unit for direct labor and a manufacturing overhead rate of 2 85. The income statement is one of a company s core financial statements that shows their profit and loss over a period of time. Companies finance their operations either through equity financing or through borrowings and loans.

Financial expenses and income on your income statement are the last group of results presented just after the operating profit. International accounting standard 23 defines finance costs as interest and other costs that an entity incurs in connection with the borrowing of funds. The income statement comes in two forms multi step and single step. The bottom line of an income statement is the net income that is calculated after subtracting the expenses from revenue.

The non operating section includes revenues and gains from non primary business activities items that are either unusual or infrequent finance costs like interest expense and income tax expense.