Pro Forma Income Statement Depreciation

A regular income statement reports the balances of these accounts for a specified past period whereas a pro forma income statement forecasts future results.

Pro forma income statement depreciation. Sit down with an income statement from the current year. And 9 incorporate the depreciation allowance. Pro forma income statement is the statement prepared by the business entity to prepare the projections of income and expenses which they expect to have in the future by following certain assumptions such as competition level in the market size of the market growth rate etc. Salaries and wages commissions advertising depreciation other total selling expenses general administrative employee benefits payroll taxes insurance rent utilities depreciation amortization office supplies travel.

Depreciation is an expense that needs to be. Physical assets such as machines equipment or vehicles degrade over time and reduce in value incrementally. Pro forma earnings describe a financial statement that has hypothetical amounts or estimates built into the data to give a picture of a company s profits if certain nonrecurring items were. Forma it will be useful to refer to a numerical example to keep things a little less abstract.

All numbers in 000 revenue gross sales less sales returns and allowances net sales. When it comes to corporate money management and accounting an income statement is considered one of the three most commonly used documents. This should ideally be done before year s end. To create a pro forma income statement work from your current income statement and try to predict the future changes.

The pro forma income p l and cash flow statements. I have posted a simple pro forma statement for a hypothetical natural gas power plant in microsoft excel format. It can be configured to. The depreciation allowance.

Pro forma income statement millions total operating revenues. It is accounted for when companies record the loss in value of their fixed assets through depreciation. Consider how each item on that statement can or will be changed during the coming year. Depreciation expense is an income statement item.

The term pro forma refers to any standard business document. A pro forma income statement differs from a regular income statement in that it is a projection of future revenues expenses and net income. What does pro forma mean.