Profit and Loss account and Profit and Loss reserve: Difference between pages

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''Financial reporting''.
Cumulative profits (for all periods to date) which have been retained by the company and not distributed to the shareholders as dividends.
 
(P&L or PL or PNL).
 
 
1. ''Primary financial statements.''
 
A profit and loss account is a primary financial statement, also known as an ''income statement'', ''statement of profit or loss'' or ''statement of operations''.
 
It shows the revenues earned in a period, matched with the expenditures incurred in the same period, to arrive at a figure of net profit or loss ''for that period''.
 
 
Under the 'double entry' accounting convention, income items in the Profit and loss account are Credits (CR) and expenses are Debits (DR).
 
:A net profit is a Credit in the Profit and loss account.
 
:A net loss is a Debit in the Profit and loss account.
 
 
Under International Accounting Standards, the profit and loss account is superseded by the ''Statement of profit or loss and other comprehensive income''.
 
 
2. ''Balance sheet account - reserves.''
 
The profit and loss account is also another name for the ''Profit and Loss reserve'' in the balance sheet.
 
Like all other accounts in the balance sheet, this shows the cumulative position, incorporating ''all'' periods from the establishment of the entity up to the balance sheet date.
 
 
Net profits or losses <u>for the single period</u> in the primary statement feed through in turn to the Shareholders' funds (<u>cumulative</u> retained profits or losses) in the 'bottom half' - reserves section - of the Balance sheet (as <u>at the end of the period</u>).
 


== See also ==
== See also ==
* [[Accruals concept]]
* [[Dividends]]
* [[Attributable profit]]
* [[Balance sheet]]
* [[Cash flow statement]]
* [[Credit balance]]
* [[Debit balance]]
* [[Environmental profit and loss]]
* [[Financial reporting]]
* [[Financial statements]]
* [[Income statement]]
* [[International Accounting Standards]]
* [[Loss]]
* [[Loss]]
* [[Primary statements]]
* [[Profit]]
* [[Profit]]
* [[Profit and Loss reserve]]
* [[Profit and Loss account]]
* [[Statement of changes in equity]]
* [[Retained earnings]]
* [[Statement of comprehensive income]]
* [[Shareholders]]
* [[Statement of profit or loss and other comprehensive income]]


[[Category:Accounting,_tax_and_regulation]]

Revision as of 14:20, 23 October 2012

Cumulative profits (for all periods to date) which have been retained by the company and not distributed to the shareholders as dividends.

See also