An important indicator of the business activity of an enterprise or organization is the size of the financial result of business activities for any period of time. This indicator is reflected in the corresponding report, which is called "On Profit and Loss" and is made out in accordance with form No. 2 of accounting.
Information that is included in the income statement is considered as an essential element of the financial statements explaining the information presented. The profit and loss statement includes 4 sections. In addition, it focuses information on some of their individual species.
The first section reflects the balance of ordinary species. It includes revenue from sales of goods, services rendered; gross profit indicators, cost parameters of already sold goods, expenses associated with commercial and managerial activities.
Line 010 shows information on income received from the sale of products, as well as from work and services performed by an enterprise or company. Moreover, if the proceeds from one type of work are exceeded by more than 5% of the total amount, it is reflected in the report in lines 011-013.
The revenue that the profit and loss statement uses as an indicator is the amount of funds that have been transferred to the enterprise’s accounts from the use of property. Revenues are also recorded in revenue . In the case when the amount of funds received does not exceed the indicator of receivables, the profit and loss account reflects the revenue in the form of the sum of funds received and the share of receivables that have not yet been paid.
The content of the second section shows the amount of interest due on deposits, and interest paid to banks or accrued by banks. Here, the positions (lines) reflect all losses and profits received from ordinary activities. These funds are shown on line 160. The profit used in this section is calculated as the difference between the profits earned before and after making the mandatory tax payments and other budget allocations.
The section “Reference data” is drawn up by the enterprise or organization in the case when they have permanent tax obligations or when the company pays dividends.
There is also a section in the report in which the profits and losses of the enterprise are decoded. This applies to non-operating assets and liabilities, and the most significant ones. More specifically on the lines:
- 210 - reflects penalties for which court decisions already exist;
- 220 - reflects the balance of previous years, that is, those losses (profits) that were established in the current accounting period;
- 230 - shows the amount of losses that are caused by an improper attitude to fulfillment of obligations and which the company or company either receives or repays;
- 240 - reflects exchange rate differences that are formed during the assessment and revaluation of fixed assets of enterprises and organizations and their liabilities, the amount of which is presented in foreign currency;
- 250 - shows the amounts that came in for a decrease in the value of material assets or, as a reserve, for depreciating investments;
- 260 - the line shows the amount of debts with the expired limitation period, as well as those for which in this period the write-off was made to the financial results of the company.
As can be seen even from such a superficial analysis, the report under consideration is a very important document not only for conducting accounting activities, but is also a necessary tool for developing an enterprise development strategy.