Income Statement

Definition

The income statement is one of the four basic financial statements required by GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards). It demonstrates how revenue translates into net income. Unlike the balance sheet, which captures information at a specific point in time, the income statement reports the information from a period of time.

Investors are mostly concerned with the operating portion of the income statement, which reports revenues and expenses that are a direct result of regular business operations.

Formula

Revenue - Expenses = Net Income

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Related Terms

Adjusted Gross Income, Asset Utilization, Balance Sheet, Cash Flow Statement, Expenses, Gross Profit, Receivables Turnover Ratio, Statement of Cash Flows