Profit and Loss Statement Format (P/L)
The following Profit and Loss Statement Format provides an outline of 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 Statement and P&L Account are used interchangeably. It is also known as the statement of operations, earnings statement, statement of financial results or income, or expense statement.
The stage at which Profit & Loss Account is prepared
Contents of Profit and Loss Statement Format
There is no particular format for P&L Account under GAAP, IFRS and Indian GAAP. Many customized formats are used. But the P&L Account must include these items:
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. In this, 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
This type of profit and loss statement format is widely used by companies in operation for many years. This format is suitable for any size company and can easily be customized. It is also useful for analyzing performance YOY.
XYZ is a UK based company in operation for many years.
P/L Format #3 – Indian Company
Indian Companies have to prepare the Profit & Loss Account as per Schedule III of Companies Act, 2013.
In India, there are basically two formats of P&L Statement.
- Horizontal format of P&L Account
- Vertical format of P&L Account
In a horizontal format, “T shaped structure” for preparing P&L account is used. It has two sides – Debit & Credit.
ABC Ltd. is an Indian company. It prepares the P&L Statement as per the schedule of Companies Act.
However, in vertical format, there is no use of a T-shaped structure. In this, the figures from trial balance are used.
Khan & Co. The bakery is an Indian company that uses a vertical format for a P&L statement
Profit and Loss Statement is prepared to ascertain the net profit or net loss made by the company during the accounting period. 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.
This is a guide to Profit and Loss Statement Format. Here we provide you with the Profit and Loss statement format for the Monthly and Annual P&L with examples. You may learn more about accounting from the following articles –