Above the Line vs Below the Line

The key difference between above and below the line is that Above the Line represents items which are shown above the value of the gross profit of the company in its statement of income during the period under consideration, whereas, Below the Line represents items which are shown below the value of the gross profit of the company in its statement of income during the period under consideration.

Above the Line vs. Below the Line Differences

Above the Line vs. Below the Line – “Above the Line” refer to the income and expenses that a company incurs due to normal operations. It is also the gross margin that a business earns. Whereas, below the line is operating expenses, interest, and taxes.

In this article, we look at the top differences between Above the Line vs. Below the Line.

What is Above the line?

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What is Below the Line?

Above the Line vs. Below the Line Infographics

Here we provide you with the top 5 difference between Above the Line vs. Below the Line.

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Above the Line vs. Below the Line  – Key Differences

The critical differences between Above the Line vs. Below the Line are as follows –

Above the Line vs. Below the Line Head to Head Difference

Let’s now look at the head to head difference between Above the Line vs. Below the Line.

Basis Above the LineBelow the Line
DefinitionATL on the income statement is where profit or income separates from other expenses. They are the sales cost of goods sold (COGS), cost of sales, and cost of services (COS).BTL in accounting is an extraordinary income or expense that the company incurs. This income or expense is not repeated, nor it affects the revenue or profit of the company.
Types of Expenses The expenses incurred by COGS are wages to labor, manufacturing cost, and cost of raw material.BTL is operating expenses, interest, and taxes.
Income and ExpenseIt refers to income and expenses related to the normal operations of the company. BTL in accounting is an extraordinary income or expense that the company incurs, but these income or expenses are not repeated, nor it affects revenue or profit of a company.
Frequency ATL is a repetitive expense.BTL is a non-repetitive expense.
Also, refer to It refers to the margin earned by the business.BTL items that include other operating expenses like tax, interest, operating expenses, and other extraordinary expenses.

Final Thought

Above the Line and Below the Line is a jargon we use to manage the resources available in the company to deliver a surplus result. ATL on the income statementIncome StatementThe 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 is profit or income separated from other expenses. They are the sales cost of goods sold (COGS), cost of sales, and cost of services (COS). Whereas Below the Line in accounting is an extraordinary income or expenses that the company incurred. However, these income or expenses are not repeated, nor it affects the revenue or profit of the company. Above the Line tells about income and expenses that are related to the normal operations of a company. Here, we calculate the profit by subtracting expenses from revenue. If the revenue exceeds the cost, then that means the company has booked a profit. Whereas if the cost exceeds the revenue means the company has booked loss during an accounting periodAccounting 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 article has been a guide to the Above the Line vs. Below the Line. Here we discuss the top differences between Above the Line vs. Below the Line along with infographics and comparison table. You may also have a look at the following articles –

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