Definition of Income Statement Formats
Income Statement Formats are the Pro-forma for the presentation of an income statement which shows the result of the organization for the period, i.e. profit or loss, and it differs from country to country as every country has different rules and according to which every country present the income statement of the entity as per norms and Pro-forma set by the respective country.
Income Statement Format Example as Per India Companies
Income statement format example as per india companies are:
Name of Company ________________________
Profit and Loss/ Income statement for the period ended _________
| Particulars | Note No. | Amount (Rs.) as at the end of a current reporting period | Amount (Rs.) as at the end of a previous reporting period | |
| Continuing Operations | ||||
| 1 | Revenue From Operations (Gross) | – | – | |
| 2 | Other Income | – | – | |
| 3 | Total Revenue (1+2) | – | – | |
| Expenses | ||||
| i) Cost of the consumed material | – | – | ||
| ii) Stock in Trade purchases | – | – | ||
| iii) Changes in the value of Inventories of stock in trade, WIP or the finished goods | – | – | ||
| iv) Employee Cost | – | – | ||
| v) Finance charges | – | – | ||
| vi) Depreciation & Amortization expenses | – | – | ||
| vii) Any other Expenses | – | – | ||
| 4 | Total Expenses amount | – | – | |
| 5 | Profit Before the exceptional items & the extra ordinary items & the Tax (3 – 4) | – | – | |
| 6 | Exceptional Items Amount | – | – | |
| 7 | Extraordinary Items Amount | – | – | |
| 8 | Profit Before the Tax (5-6-7) | – | – | |
| 9 | Tax Expense | |||
| Current Tax | – | – | ||
| Deferred Tax | – | – | ||
| 10 | Profit or (Loss) from the continuing operations (8 – 9) | – | – | |
| 11 | Profit or Loss from the Discontinuing Operations | – | – | |
| 12 | Tax expense from the Discontinuing Operations | – | – | |
| 13 | Net Profit or Loss from the Discontinuing Operations (11 – 12) | – | – | |
| 14 | Profit or Loss for the Period (10 + 13) | – | – | |
| 15 | EPS | |||
| Basic | ||||
| Diluted |
Important Notes:
- In Case of Revenue from operations Revenue from the sale of goods, sale of services and other operating revenue less recoverable taxes is to be shown separately in notes.
- Other income like dividend, interest to be shown separately so that the nature of income can become known.
- In the case of finance cost, borrowing cost, interest cost and finance cost due to currency fluctuations to be shown separately in notes to accounts.
- In Administration expenses, salaries and wages, payment to auditors, contribution to provident fund, expenses on employee stock options, staff welfare expenses etc., are to be shown separately.
- Prior Period items are also to be shown separately.
- Basic Earnings are calculated as Net earnings divided by a number of shares.
- Diluted Earnings is calculated as net income less preference dividend divided by the weighted average number of shares, including the effect of convertible preference shares and convertible debentures.
- The Companies Act governs Indian Companies and to be listed under the Securities and exchange board of India. Hence the regulations as per the Companies Act and SEBI are to be followed.
Income Statement Format Example as per US GAAP
Income Statement format example as per US GAAP are:
Name of Company _____________________
Income Statement for the year ended ______
| Particulars | Amount ($) | Amount ($) | Amount ($) | |
| I | Sales | XXXXX | ||
| II | Less: Sales Discount | XXX | ||
| Sales Returns and allowances | XXX | XXXX | ||
| III | Net Sales Revenue (I – II) | XXXX | ||
| IV | Cost of Goods Sold | XXXX | ||
| Gross Profit (III-IV) | XXXX | |||
| V | Selling Expenses | |||
| Sales Salaries and Commission | XXX | |||
| Sales Office Salaries | XXX | |||
| Travel and Entertainment | XXX | |||
| Advertising Expense | XXX | |||
| Freight and Transportation – out | XXX | |||
| Shipping Supplies and expenses | XXX | |||
| Postage and Stationery | XXX | |||
| Telephone and Internet Expense | XXX | |||
| Depreciation of Sales Equipment | XXX | |||
| Other Selling Expense | XXX | XXXX | ||
| VI | Administrative Expenses | XXX | ||
| Officers’ salaries | XXX | |||
| Office Salaries | XXX | |||
| Legal and Professional services | XXX | |||
| Utilities expense | XXX | |||
| Insurance expense | XXX | |||
| Depreciation of Building | XXX | |||
| Depreciation of Office Equipment | XXX | |||
| Stationery, Supplies and Postage | XXX | |||
| Miscellaneous office expenses | XXX | XXXX | XXXX | |
| VII | Other Income and Expense | |||
| Dividend Revenue | XXX | |||
| Rental Revenue | XXX | |||
| Gain on sale of Plant Assets | XXX | XXX | XXXX | |
| VIII | Income from operations | |||
| Interest on Bonds and notes | XXX | |||
| Income before Income Tax | XXXX | |||
| Income Tax | XXX | |||
| Net Income for the year | XXXX | |||
| Attributable to: | ||||
| Shareholders of Company | XXX | |||
| Non-Controlling Interest | XXX | |||
| Earnings Per Share | XX |
Notes:
- Earnings Per Share is calculated as Net Income for the year divided by the number of shares.
- US Companies are governed by the Securities Act and Securities and Exchange Act, and the regulations of the above acts to be followed.
Income Statement Format Example as UK GAAP
Income Statement format example as UK GAAP are:
Name of Company _____________
Income Statement for the period ended ___________
| Particulars | Amount (£) | |
| Continuing operations | ||
| I | Revenue | XXX |
| II | Cost of sales | XXX |
| III | Gross profit (I – II) | XXX |
| IV | Distribution costs | XXX |
| V | Administrative expenses | XXX |
| VI | Profit from operations (III – IV – V) | XXX |
| VII | Finance costs | XX |
| VIII | Profit before tax (VI-VII) | XXX |
| IX | Tax | XX |
| X | Profit from continuing operations | XXX |
| Other comprehensive income for the year | ||
| XI | Gain on revaluation of property | XXX |
| XII | Total comprehensive income for the year (X + XI) | XXX |
Notes:
- Distribution cost includes the cost incurred to deliver the product and other cost related to the product distribution and promotion.
- Administrative cost includes the salaries, wages and other office costs.
- Finance Cost includes the interest on borrowings, other interest etc.
- Profit or Loss on Revaluation is to be shown in the income statement as per the US laws.
Conclusion
Different Companies are governed by the Acts under which they registered as per the laws of that country. The ultimate purpose of the income statement is to show the results of the operations, whether there is profit or loss and the only presentation makes it different like in the case of India, it is mandatory to show income from ordinary and extra ordinary activities and whereas as per US and UK law there is no such option. Hence, the organisation’s presentation and the governing act make the difference, but the ultimate purpose of all the entities from any country is the same.
Recommended Articles
This is a guide to Income Statement Formats. Here we also discuss the definition and income statement format example as per India Companies, US GAAP, and UK GAAP. You may also have a look at the following articles to learn more –
