Income Statement (Profit and Loss Statement)

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Income statement is a financial statement that summarizes the various transactions of a business during a specified period, showing the net profit or loss. Income statement measures a company's financial performance over a specific accounting period. It is often referred as a profit and loss statement (P&L).

The income statement (statement of comprehensive income) is one of the major financial statements used by accountants and business owners (the other major financial statements are the balance sheet (statement of financial position), statement of changes in equity and statement of cash flows). It indicates how the revenue (money received from the sale of products and services) is transformed into net income (the result after all expenses and taxes). The important thing to remember about an income statement is that it represents a period of time. This contrasts with the balance sheet (statement of financial position) which represents a single moment in time.

International Financial Reporting Standards do not prescribe the exact format of the income statement but it can be obtained from IFRS Taxonomy. Moreover, IFRS tend to use the statement of comprehensive income instead of the income statement.Statement of comprehensive income comprises both income statementandother comprehensive income which is not reflected in profits and losses.

For more information about structure and composition of income statement see "statement of comprehensive income ".

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