Schedule III (Part II) – Format of Statement of Profit & Loss
Introduction
The Statement of Profit and Loss shows the financial performance of the company. It lists Revenues and Expenses to arrive at Profit After Tax (PAT).
1. The Format
| Note No. | Particulars | Figures for Current Period | Figures for Prev Period |
|---|---|---|---|
| I. | Revenue from Operations | (Amount) | (Amount) |
| II. | Other Income | (Amount) | (Amount) |
| III. | Total Revenue (I + II) | (Total) | (Total) |
| IV. | Expenses: | ||
| (a) Cost of materials consumed | (Amount) | (Amount) | |
| (b) Purchases of Stock-in-Trade | (Amount) | (Amount) | |
| (c) Changes in inventories of FG, WIP, Stock | (Amount) | (Amount) | |
| (d) Employee Benefits Expense | (Amount) | (Amount) | |
| (e) Finance Costs | (Amount) | (Amount) | |
| (f) Depreciation and Amortization | (Amount) | (Amount) | |
| (g) Other Expenses | (Amount) | (Amount) | |
| Total Expenses | (Total) | (Total) | |
| V. | Profit before Exceptional Items and Tax (III - IV) | (Amount) | (Amount) |
| VI. | Exceptional Items | (Amount) | (Amount) |
| VII. | Profit Before Tax (V - VI) | (Amount) | (Amount) |
| VIII. | Tax Expense: | ||
| (1) Current Tax | (Amount) | (Amount) | |
| (2) Deferred Tax | (Amount) | (Amount) | |
| IX. | Profit (Loss) for the period (VII - VIII) | (Amount) | (Amount) |
| X. | Earnings Per Share: | ||
| (1) Basic | (Amount) | (Amount) | |
| (2) Diluted | (Amount) | (Amount) |
2. Key Classifications
A. Revenue from Operations
- Sale of products/services + Other Operating Revenues (Scrap sale).
- Excise Duty is shown as an expense or deducted (depending on accounting policy), usually Net Sales is taken.
B. Cost of Materials Consumed
- Opening Stock of Raw Material + Purchases - Closing Stock of Raw Material.
C. Changes in Inventories
- (Opening Stock - Closing Stock) of Finished Goods, WIP, and Stock-in-Trade.
- Note: Positive figure if Op > Cl. Negative if Cl > Op.
D. Employee Benefits Expense
- Salaries, Wages, PF Contribution, Staff Welfare, Gratuity.
E. Finance Costs
- Interest Expense, Borrowing Costs, Processing Fees.
F. Depreciation & Amortization
- Depreciation on Tangible Assets.
- Amortization of Intangible Assets.
G. Other Expenses
- Consumption of Stores, Power & Fuel, Rent, Repairs, Insurance, Audit Fees.
Exam Notes: Writing the Answer
Question: "Where is 'Interest on Debentures' shown?" (2 Marks)
Answer: Under the head Expenses -> Subhead Finance Costs.
Question: "How is 'Sale of Scrap' treated?"
Answer: Included in Revenue from Operations (Other Operating Revenue).
Question: "Where is 'Gain on Sale of Fixed Asset' shown?"
Answer: Under Other Income.
Summary
- Structure: Revenue - Expenses = PBT - Tax = PAT.
- Inventory Change: Strictly (Opening - Closing).
- EPS: Must be shown on the face of SPL.
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