Question

Prepare the format of statement of Profit and Loss and explain its items.

Answer 1

Format of Statement of Profit and Loss- As per the REVISED SCHEDULE VI

Statement of Profit and Loss for year ended...
S. No.	Particulars	Note No.	Figures for the Current Year	Figures for the Previous Year
I	Revenue from Operations
II	Other Income
III	Total Revenue (I + II)
IV	Expenses:
	Cost of Material Consumed
	Purchase of Stock-in-Trade
	Changes in inventories of finished goods
	Work-in-progress and Stock-in-Trade
	Employee Benefit Expenses
	Finance Cost
	Depreciation and Amortisation Expenses
	Other Expenses
	Total Expenses
V	Profit before exceptional and extraordinary items and tax (III – IV)
VI	Exceptional items
VII	Profit before extraordinary item and tax (V – VI)
VIII	Extraordinary Items
IX	Profit Before Tax (VII – VIII)
X	Tax Expenses
	(1) Current Tax
	(2) Deferred Tax
XI	Profit/(Loss) for period from continuing operations (IX – X)
XII	Profit/ (Loss) from discontinuing operations
XIII	Tax expenses of discontinuing operations
XIV	Profit/(Loss) from discontinuing operations (after Tax (XII – XIII)
XV	Profit (Loss) for the period (XI + XIV)
XVI	Earning Per Equity Shares
	(1) Basic
	(2) Diluted

I. Revenue from Operations- It refers to the revenue earned from the basic operating business activities of an organization. For Non-financing companies, it consists of the following.

• Sale of Products
• Sale of Services
• Other Operating Revenues

For financing companies, revenue from operations includes the following.

• Interest
• Dividends
• Other Financial Services

II. Other Incomes- This income includes the income earned other than from the operating activities of a business. It comprised of the following incomes.

• Interest Income (in case of Non-Financing Company)
• Dividend Income (in case of Non-Financing Company)
• Net Gain or Loss on Sale of Investments
• Other Non-Operating Incomes (i.e. after deducting expenses directly related to such income)

III. Expenses- These can be bifurcated in the following given below types.

• Cost of Materials Consumed- It includes all the materials consumed during the process of manufacturing. It can also be calculated with the help of the given below formula.

Material Consumed = Opening Stock of Raw Material + Purchase of Raw Material – Closing Stock of Raw Material

• Purchase of Stock-in-Trade- It includes all the goods purchased by a trading concern with an intention of resell.

• Change in Inventories, Work-in-Progress and Stock-in-Trade- It is difference of opening and closing balance of inventories (stock), work-in-progress and stock-in-trade.