Purpose Of Income Statement Pdf

In arriving at net income the statement presents the following subtotals.

Purpose of income statement pdf. Income statement also known as profit loss account is a report of income expenses and the resulting profit or loss earned during an accounting period. Module 5 statement of comprehensive income and income statement ifrs foundation. Boc hong s in come statement includes all of the major items in the list above except for discontin ued operations. The purpose of the balance sheet is to inform the users about the number of assets that an entity has the liabilities that entity owe and the amount of its equity.

Training material for the ifrs for smes version 2013 1 2 ifrs for smes the ifrs for smes is intended to apply to the general purpose financial statements of entities that do not have public accountability see section 1 small and medium sized entities. The period can be a quarter if it is a quarterly income statement or a year if it is an annual report. The purpose of the income statement is to show the reader how much profit or loss an organization generated during a reporting period this information is more valuable when income statements from several consecutive periods are grouped together so that trends in the different revenue and expense line items can be viewed. Chapter 4 income statement and related information 4 3 illustration illustration 4 2 presents an income statement for boc hong company.

It is also referred to as a profit and loss statement or earnings statement. Example following is an illustrative example of an income statement prepared in accordance with the format prescribed by ias 1 presentation of financial statements. The purpose of the income statement is to provide the financial earnings performance of the entity over a specific period of time. Income statement is one of the important financial reports of company which is prepared with the purpose of providing the summary of all the revenues and the expenses over the time period in order to ascertain the profit or loss of the company and measuring its business activity over the time period depending upon various requirements of users.

The income statement contains several subtotals that can assist in. The income statement is one of a company s core financial statements that shows their profit and loss over a period of time. The next is the income statement shown in figure 3 2 which provides information on the revenues and expenses of the firm and the resulting income made by the firm during a period. The profit or loss is determined by taking all revenues and subtracting all expenses from both operating and non operating activities this statement is one of three statements used in both corporate finance including financial modeling and accounting.