Profit and Loss Statement Format (P/L)

The following Profit and Loss Statement Format outlines the most common Income Statement. It is impossible to provide a complete set of examples that address every variation in every situation since there are thousands of such Profit and Loss Statements formats based on geography, accounting policies, etc.

Income StatementsIncome StatementsThe income statement is one of the company’s financial reports that summarizes all of the company’s revenues and expenses over time in order to determine the company’s profit or loss and measure its business activity over time based on user requirements.read more and P&L Accounts are used interchangeably. It is also known as the statement of operationsStatement Of OperationsStatement of Operations, also known as the income statement, displays a Company’s revenues & expenditures for a specified period, i.e., monthly, quarterly, or annually in a standard accounting format in accordance with the accounting policies suggested by the governing body.read more, earnings statement, financial results or income, or expense statement.

The stage at which Profit & Loss Account is prepared

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Contents of Profit and Loss Statement Format

There is no particular format for P&L Account under GAAPGAAPGAAP (Generally Accepted Accounting Principles) are standardized guidelines for accounting and financial reporting.read more, IFRS, and Indian GAAP. Many customized formats are used. But the P&L Account must include these items:

  • RevenueReturnsNet RevenueNet RevenueNet revenue refers to a company’s sales realization acquired after deducting all the directly related selling expenses such as discount, return and other such costs from the gross sales revenue it generated.read moreCost of Goods SoldCost Of Goods SoldThe Cost of Goods Sold (COGS) is the cumulative total of direct costs incurred for the goods or services sold, including direct expenses like raw material, direct labour cost and other direct costs. However, it excludes all the indirect expenses incurred by the company.
  • read moreGross ProfitGross ProfitGross Profit shows the earnings of the business entity from its core business activity i.e. the profit of the company that is arrived after deducting all the direct expenses like raw material cost, labor cost, etc. from the direct income generated from the sale of its goods and services.read moreAdvertising & PromotionDepreciation & AmortizationRent and Office ExpensesSalariesSG&A ExpensesEBITEBITEarnings before interest and tax (EBIT) refers to the company’s operating profit that is acquired after deducting all the expenses except the interest and tax expenses from the revenue. It denotes the organization’s profit from business operations while excluding all taxes and costs of capital.read moreInterest ExpenseInterest ExpenseInterest expense is the amount of interest payable on any borrowings, such as loans, bonds, or other lines of credit, and the costs associated with it are shown on the income statement as interest expense.read moreEATIncome TaxesNet Earnings

Profit and Loss Statement Format with Examples

P/L Format #1 – Monthly Statement

The monthly P&L template is suitable for companies that require regular reporting and detail. All the information is shown in a series of monthly columns.

This format is apt for small, medium, and large companies.

Here, XYZ is a US-based company that follows GAAP.

P/L Format #2 – Annual Statement

Companies have used this type of profit and loss statement format for many years. This format is suitable for any size company and can easily be customized. It is also useful for analyzing performance YOU.

XYZ is a UK-based company in operation for many years.

P/L Format #3 – Indian Company

Indian Companies must prepare the Profit & Loss Account as per Schedule III of the Companies Act, 2013.

In India, there are two formats of P&L statements.

  • The horizontal format of the P&L AccountThe vertical format of the P&L Account

The “T-shaped structure” for preparing the P&L account is used in a horizontal format. It has two sides – Debit & Credit.

ABC Ltd. is an Indian company. It prepares the P&L Statement as per the schedule of the Companies Act.

However, in vertical format, there is no use of a T-shaped structure. In this, the figures from trial balance are used.Trial Balance Are Used.Trial Balance is the report of accounting in which ending balances of a different general ledger are presented into the debit/credit column as per their balances where debit amounts are listed on the debit column, and credit amounts are listed on the credit column. The total of both should be equal.read more

Khan & Co. The bakery is an Indian company that uses a vertical format for a P&L statement.

Conclusion

A profit and Loss Statement is prepared to ascertain the company’s net profit or net loss during the accounting accounting period Accounting PeriodAccounting Period refers to the period in which all financial transactions are recorded and financial statements are prepared. This might be quarterly, semi-annually, or annually, depending on the period for which you want to create the financial statements to be presented to investors so that they can track and compare the company’s overall performance.read more. This is one of the most important objectives of the business. This is also important to various other parties. It also summarizes our revenue and expenses, thus analyzing how money has come and how it goes out.

his is a guide to Profit and Loss Statement Format. Here we provide you with examples of the Profit and Loss statement format for the Monthly and Annual P&L. You may learn more about accounting from the following articles –

  • Profit and Loss Statement ExamplesExamples of Trial BalanceProfit and Loss Template