IFRS Income Statement Template is an example income statement prepared under IFRS reporting guidelines. First off however you may be interested to know what an income statement essentially refers to and what exactly is presented in one. Just for a side note, IFRS is a reporting framework applied globally and most local GAAPs are more or less in compliance with IFRS.
Now, let’s continue with the income statement itself. You may recall the terms “profit and loss statement”, “statement of financial performance”, “earnings statement” or “statement of operations” being used in some materials, but essentially an income statement is one of those basic financial statements, which need to be presented in the annual report and which you may be required to disclose alongside usually with the balance sheet to management, investors, those charged with governance etc.
An income statement as our IFRS Income Statement Template indicates how company’s revenue is transformed into net income. It takes into account all sales for the reporting period (note that an income statement represents a period of time and not a single moment like the balance sheet) and deducts from it all expenses incurred during the same period equaling to net result as profit or loss for the reporting period. Putting things into simple words, this is how an income statement basically works. Now as the income statement discloses the net result and when presented in many details the company’s performance by function of expenses and incomes, it’s a useful tool for both investors, management and everyone else making decisions concerning the company.
An income statement can be presented in two ways, with one of them being a simpler version than the other. When your company is small and is not reporting under IFRS nor is required by your local GAAP it may on the statement total all revenues and subtract expenses to find the end result. However, as in our IFRS Income Statement Template, a more difficult version requires a structured presentation. Namely the expenses are grouped by their functions essentially. Thus our IFRS Income Statement Template is prepared by function of expense.