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cumulative effect of changes in accounting policies

Income statement

From Wikipedia, the free encyclopediaJump to navigationJump to search“Profit and loss” redirects here. For other uses, see Profit and Loss (disambiguation).”Top line” redirects here. For the 1988 Italian film, see Alien Terminator.

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Sankey Diagram - Income Statement (by Adrián Chiogna)

Sankey Diagram – Income Statement (by Adrián Chiogna)


An income statement or profit and loss account[1] (also referred to as a profit and loss statement (P&L), statement of profit or lossrevenue statementstatement of financial performanceearnings statementoperating statement, or statement of operations)[2] is one of the financial statements of a company and shows the company’s revenues and expenses during a particular period.[1]


It indicates how the revenues (also known as the “top line”) are transformed into the net income or net profit (the result after all revenues and expenses have been accounted for. The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported.

An income statement is that it represents a period of time (as does the cash flow statement). This contrasts with the balance sheet, which represents a single moment in time.

Charitable organizations that are required to publish financial statements do not produce an income statement. Instead, they produce a similar statement that reflects funding sources compared against program expenses, administrative costs, and other operating commitments. This statement is commonly referred to as the statement of activities.[3] Revenues and expenses are further categorized in the statement of activities by the donor restrictions on the funds received and expended.