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| Profit and loss account |
Introduction:- A profit and loss statement is a record of revenue
and expenses incurred by a business in a given period of time. A profit
and loss statement is also called a P&L, an income statement, a
statement of profit and loss, an income and expense statement, or a
statement of financial results. The P&L shows management and
investors whether a company made a profit or lost money in the time
period covered by the report.
The following are the General instruction for the preparation of profit and loss account of a listed company: -
2.The Statement of Profit and Loss shall include:
(1) Profit or loss for the period,
(2)Other Comprehensive Income for the period. The sum of (1) and
(2) above is "Total Comprehensive Income."
3. Revenue from operations shall disclose separately in the notes
(a) sale of products (including Excise Duty)
(b) sale of services, and
(c) other operating revenues.
4.Finance Costs: Finance costs shall be classified as
(a) interest,
(b) dividend on redeemable preference shares
(C) exchange differences regarded as an adjustment to borrowing costs and
(d) other borrowing costs (specify nature)
5 Other income: Other income shall be classified as-
(a) interest income
(b) dividend Income, and
(c) other non-operating income (net of expenses directly attributable to
such income)
6.Other Comprehensive Income shall be classified into-
6. Other Comprehensive Income shall be classified into -
(A) Items that will not be reclassified to profit or loss :
(i) Changes in revaluation surplus;
(ii) Remeasurements of the defined benefit plans;
(iii) Equity Instruments through Other Comprehensive Income
(iv) Fair value changes relating to own credit risk of financial liabilities
designated at fair value through profit or loss,
(w) Share of Other Comprehensive Income in Associates and Joint
Ventures, to the extent not to be classified into profit or loss and
(vi) Others (specify nature).
(B) Items that will be reclassified to profit or loss,
(1) Exchange differences in translating the financial statements of a foreign operation;
(ii) Debt Instruments through Other Comprehensive Income
(iii) The effective portion of gains and loss on hedging instruments in
a cash flow hedge;
(iv) Share of Other Comprehensive Income in Associates and Joint
Ventures, to the extent to be classified into profit or loss, and
(v) Others (specify nature).
7. Additional Information: A Company shall disclose by way of notes, additional
information regarding aggregate expenditure and income on the following
items:
(a) employee Benefits expense (showing separately
(1) salaries and wages,
(ii) contribution to provident and other funds,
(ii) share based payments to employees,
(iv) staff welfare expenses)
(b) depreciation and amortisation expense;
(c) any item of income or expenditure which exceeds one per cent
of the revenue from operations or 10,00,000, whichever is higher,
in addition to the consideration of materiality' as specified in
clause 7 of the General Instructions for Preparation of Financial
Statements of a Company:
(d) interest Income;
(e) interest Expense;
(f) dividend income,
(g) net gain or loss on sale of investments
(h) net gain or loss on foreign currency transaction and translation
(other than considered as finance cost);
(i) payments to the auditor as (a) auditor, (b) for taxation matters,
(c) for company law matters, (d) for other services, (e) for
reimbursement of expenses,
(j) in case of companies covered under section 135, amount of
expenditure incurred on corporate social responsibi.ity activities,
and
(k) details of items of exceptional nature,
8. Changes in Regulatory Deferral Account Balances shall be presented in the Statement of Profit and Loss in accordance with the relevant Indian Accounting Standards
Exceptional Items:
When items of income and expense, even though related to ordinary
activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise, such items are known as exceptional items. Such items include:
(i) Writing down of inventories to net realisable value or of fixed assets to recoverable amount, as well as reversals of such write-
downs,
(ii) restructuring of the activities of the enterprise,
(iii) disposal of items of fixed assets,
(iv) disposal of long-term investments,
(v) legislative changes having retrospective application,
(vi) litigation settlements.