The document defines a statement of profit and loss (also known as an income statement) as a financial statement that summarizes the revenues, costs and expenses incurred during a period of time, usually a quarter or year. It provides information on a company's ability to generate profit by increasing revenue and reducing costs. The document then provides the standard format and sections included in a statement of profit and loss, such as revenue from operations, other income, expenses, profit/loss, and earnings per share calculations. Key expenses include cost of materials, purchases, employee costs, depreciation, and finance costs.

1. Format of
Statement of Profit and Loss
1

2. Definition
A financial statement that summarizes the revenues,
costs and expenses incurred during a specific period of
time - usually a fiscal quarter or year. These records
provide information that shows the ability of a company
to generate profit by increasing revenue and reducing
costs. The P&L statement is also known as a "statement
of profit and loss", an "income statement" or an "income
and expense statement".

3. STATEMENT OF PROFIT & LOSS
Particulars
Note Figures as at the end of
No. the current reporting
period
1)Revenue from Operations
2)Other Income
3)Total Revenue ( 1 + 2)
4)Expenses
Cost of Materials Consumed
Purchases of Stock in Trade
Changes in inventories
Employee Benefit expense
Finance Costs
Depreciation and amortization expense
Other expenses
5)Profit Before Exceptional and extraordinary
items and tax(3-4)
6)Exceptional Items
Figures as at the
end of the previous
reporting period

4. STATEMENT OF PROFIT & LOSS
Particulars
Note Figures as at the
No. end of the current
reporting period
7)Profit Before extraordinary items and tax(5-6)
8)Extraordinary Items
9)Profit Before Tax(7-8)
10)Tax Expense
Current Tax
Deferred Tax
11)Profit (loss) for the period from continuing
operations(9-10)
12)Profit (loss) from discontinuing operations
13)Tax expense of discontinuing operations
14)Profit(loss) from discontinuing operations (after tax)
15)Profit (loss) for the period (11+14)
16)Earnings per equity share
Basic
Diluted
Figures as at the
end of the previous
reporting period

5. 5

6. HYPERLINKS
6

7. REVENUE FROM OPERATIONS

Revenue from operations of a company other than a finance
company
•
•
•
•
Sale of products
Sale of services
Other operating revenues
Less: Excise duty
 Revenue
•
•
from operations of a finance company
Interest
Other financial services
Revenue under each of the above heads shall be disclosed separately by
way of notes to accounts to the extent applicable.

8. OTHER INCOME

Interest Income (other than a finance company)
 i) Dividend from Subsidiary companies
ii) Dividend
 Net Gain/Loss on sale of investments.
 Other non-operating income (net of expense directly attributable
to such income)

9. COST OF MATERIALS CONSUMED
Applicable for manufacturing companies
 Includes Raw materials, packing materials
and intermediaries consumed


10. PURCHASE OF
STOCK IN TRADE
CHANGES IN
INVENTORIES
• Includes those purchased for
the purpose of resale
• Separate disclosures w.r.t
finished goods, work in
progress and stock in trade.

11. EMPLOYEE
BENEFIT
EXPENSES
Salaries
& Wages
Contribution to
provident & other
funds
Staff welfare
expenses such
as canteen
expenses

12. FINANCE COSTS
Interest expenses
Other borrowing
costs
Net gain/loss on
foreign currency
transactions and
translation
12

13. EXCEPTIONAL ITEMS
When items of income and expense, even though related to
ordinary activities are of such size, nature or incidence that their
disclosure is relevant to explain the performance of the
enterprise, such items are known as exceptional items. Such
items include:
 Write-downs of inventories to net realisable value or of fixed
assets to recoverable amount
 Restructurings of the activities of the enterprise
 Disposals of items of fixed assets
 Disposals of long term investments
 Legislative changes having retrospective application
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14. EXTRAORDINARY ITEMS
When an event or transaction is clearly distinct from the ordinary
activities of the enterprise it is called extraordinary item.
For example, losses sustained as a result of an earthquake is an
extraordinary item.
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15. BASIC EARNING PER SHARE


NET PROFIT
NO. OF EQUITY SHARES
15

16. DILUTED EARNINGS PER SHARE
It is calculated when there are convertible preference shares,
convertible debentures, options, warrants, etc. in the capital
structure of a company.
Diluted earnings per share focuses how much dilution would take
place in Earning Per Share(E.P.S.) if all these convertible
instruments are immediately converted into equity shares.
=
NET PROFIT
CURRENT EQUITY SHARES +CONVERTIBLE BONDS
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