Income statement

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Financial reporting - primary statements.


A statement that sets out how the net profit or loss for a period is arrived at.

Also known as the statement of profit or loss or profit and loss account.

Under the 'double entry' accounting convention, income items in the Income statement are Credits (CR) and expenses are Debits (DR) for the period.

A net profit is a Credit in the Income statement.

A net loss is a Debit in the Income statement.

Net profits or losses for the period - in the Income statement - feed through in turn to the Shareholders' funds (cumulative retained profits or losses) in the 'bottom half' of the Balance sheet (as at the end of the period).

See also