What is a segmented income statement

What is an income statement? Profit and loss account explained simply

A profit and loss account in staggered form and based on the total cost method begins with the Sales revenue: While in the past it was only understood to mean income that was generated through normal business activities for the company, the term is now broader. Now this also includes revenues that arise from secondary business.

Under the point Increase or decrease in stocks record the difference between finished and unfinished products at the beginning and at the end of the observation period - usually the fiscal year. In doing so, note both changes in quantity and changes in value, such as those caused by quality discounts or other impairments. However, a change in the inventory of goods is not recorded under this point: Instead, you list it under the cost of materials. The other own work capitalized consist of self-created items: self-made buildings or machines that were built or manufactured by the company's own workforce and are intended to remain in the company. These are then depreciated over the useful life of the assets created.

The vague term of other operating income simply sums up all yields that do not fit into another category. The Cost of materials split into two categories. Under point 5a you list all costs that you have incurred for raw materials, consumables and supplies as well as for purchased goods (which do not appear under point 2). Changes that were noticed during an inventory, for example due to theft, also appear here. Under point 5b you list services that you have received from third parties in the course of your production processes. These are, for example, repairs to machines.

The point Personnel expenses records all costs incurred by your employees. You divide this into wages (6a) and the corresponding social security contributions (6b). The total cost method also divides the Depreciation in two sub-categories. Under 7a you enter all depreciation of fixed assets. Point 7b, on the other hand, contains depreciation of current assets that exceed the level of regular depreciation within the company. The other operating expenses Finally, they represent a collective item: In this category you list all costs that are to be included in operational processes that have not been included in the previous points.

This concludes the operating result. All other categories are to be assigned to the financial result. Its first posts are those Income from investments: These include, for example, income from dividends or profit shares. On the other hand, point 10 Income from other securities and loans. There you summarize income that the company has generated from interest, for example. The financial result also includes the other interest and similar income A collective item: In this category, you list all other financial income that cannot be assigned to one of the other two items.

Now you still pull Depreciation on financial assets and on securities held as current assets from. Unlike the ones listed under point 7, these are depreciations that affect the financial sector and not the operating sector. You also subtract from your financial result Interest and similar expensesthat your company has to pay for. After deducting company taxes (divided into two items), you have calculated your annual surplus or annual deficit.