{"id":23890,"date":"2024-07-15T07:00:46","date_gmt":"2024-07-15T11:00:46","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=23890"},"modified":"2026-02-12T04:04:46","modified_gmt":"2026-02-12T09:04:46","slug":"income-statement-template","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/income-statement-template\/","title":{"rendered":"Income Statement Template (download for Excel)"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tIncome Statement Template (download for Excel)\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2024-07-15T07:00:46-04:00\">July 15, 2024<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Income Statement Template (download for Excel)\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/income-statement-template\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-us\/blog\/author\/yassirmalik\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/03\/Yassir-Malik.jpg\" class=\"entry-author__image\" alt=\"yassir-malik-profile-picture\" \/>\t\t\t\t<span class=\"entry-author__name\">Yassir Malik<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<p>The income statement is one of the core financial statements used in business and finance to assess the profitability of a company over a specific period.<\/p>\n\n\n\n<p>It\u2019s useful for anyone running a business or planning personal finances.<\/p>\n\n\n\n<p>In this guide, we show you how to complete an income statement with a template for you to download. <\/p>\n\n\n\n<p>We also highlight the differences to consider such as multi-step or single-step, GAAP or IFRS and Operating Revenue or Non-Operating Revenue.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-here-s-what-we-ll-cover\">Here&#8217;s what we&#8217;ll cover<\/h4>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-what-is-an-income-statement\" data-level=\"2\">What is an income statement?<\/a><\/li><li><a href=\"#h-what-s-included-in-an-income-statement\" data-level=\"2\">What&rsquo;s included in an income statement<\/a><\/li><li><a href=\"#h-differences-in-income-statements-to-consider\" data-level=\"2\">Differences in income statements to consider<\/a><\/li><li><a href=\"#h-income-statement-templates\" data-level=\"2\">Income statement templates<\/a><ul><li><a href=\"#h-multi-step-income-statement\" data-level=\"3\">Multi-step income statement<\/a><\/li><li><a href=\"#h-single-step-income-statement\" data-level=\"3\">Single-step income statement<\/a><\/li><\/ul><\/li><li><a href=\"#h-faqs\" data-level=\"2\">FAQs<\/a><ul><li><a href=\"#h-do-all-businesses-have-to-produce-an-income-statement\" data-level=\"3\">Do all businesses have to produce an income statement?<\/a><\/li><li><a href=\"#h-what-is-the-difference-between-operating-revenue-and-non-operating-revenue\" data-level=\"3\">What Is the difference between operating revenue and non-operating revenue?<\/a><\/li><li><a href=\"#h-the-differences-between-us-gaap-and-ifrs\" data-level=\"3\">The differences between US GAAP and IFRS<\/a><\/li><\/ul><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-an-income-statement\">What is an income statement?<\/h2>\n\n\n\n<p>An income statement shows the revenue and expenses of a company and calculates if the company made a profit or loss in a specific period. <\/p>\n\n\n\n<p>An income statement is also known either as a profit and loss statement (P&amp;L) or as a revenue statement.<\/p>\n\n\n\n<p>The income statement is part of a set of financial statements including the balance sheet and <a href=\"https:\/\/www.sage.com\/en-us\/blog\/cash-flow-statement-explained\/\">cash flow statement<\/a> that offer a comprehensive view of the financial health of a company.<\/p>\n\n\n\n<p>Unlike a balance sheet which shows a snapshot of a company\u2019s financial position at a single point in time, an income statement shows activity over a period of time, usually a month, a quarter, or a year. <\/p>\n\n\n\n<p>It\u2019s a dynamic view of the financial activities and the results of those activities during the covered period. <\/p>\n\n\n\n<p>The statement usually compares periods of time either month on month (MoM), or year on year (YoY).<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Income Statement Template<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p>Download your free income statement templates<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"##gate-eaffa782-26d8-44b2-a97f-92ba8476b9bf\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"525\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-single-step-1-525x810.jpg\" class=\"single-cta__image\" alt=\"A screenshot of a income statement template\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-single-step-1-525x810.jpg 525w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-why-produce-an-income-statement\">Why produce an income statement?<\/h4>\n\n\n\n<p>It\u2019s important for companies to produce financial statements on a regular basis. <\/p>\n\n\n\n<p>Not just for regulatory compliance, but also to keep track of their financial position, financial performance, and their cash flow. <\/p>\n\n\n\n<p>This information helps a company to make economically informed choices for their strategy. <\/p>\n\n\n\n<p>It also provides an overview of the value of the company and allows stakeholders to review the performance of the management team.<\/p>\n\n\n\n<p>An income statement can help to show:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If sales are improving and the impact this has on profitability<\/li>\n\n\n\n<li>If the cost of goods are increasing out of line with sales<\/li>\n\n\n\n<li>If expense cuts have affected profitability<\/li>\n\n\n\n<li>Areas for spending cuts<\/li>\n\n\n\n<li>Areas for growth<\/li>\n\n\n\n<li>If profits are improving<\/li>\n<\/ul>\n\n\n\n<p>An income statement is useful for both internal <a href=\"https:\/\/www.sage.com\/en-us\/accounting-software\/financial-management\/\" target=\"_blank\" rel=\"noreferrer noopener\">financial management<\/a> and external stakeholders:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Management<\/strong> can track revenue and expenses, providing a clear picture of what drives profits and where costs can be managed better.<\/li>\n\n\n\n<li><strong>Investors<\/strong> are able to assess profitability, trends in expenses and the efficiency of company operations over time.<\/li>\n\n\n\n<li><strong>Lenders<\/strong> can determine a company&#8217;s ability to generate enough profit to cover new and existing debt obligations.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-s-included-in-an-income-statement\">What\u2019s included in an income statement<\/h2>\n\n\n<div class=\"lottie-animation\">\n\t<figure class=\"lottie-animation__figure\" data-sage-lottie-animation=\"{&quot;id&quot;:&quot;lottie-eaf90033-59a4-4a6b-8876-1204d5a47b88&quot;,&quot;playOn&quot;:&quot;pageLoad&quot;,&quot;loop&quot;:false,&quot;controls&quot;:true,&quot;speed&quot;:1,&quot;width&quot;:&quot;&quot;,&quot;mode&quot;:&quot;forward&quot;,&quot;animationData&quot;:{&quot;file&quot;:31146,&quot;src&quot;:&quot;https:\\\/\\\/www.sage.com\\\/en-us\\\/blog\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2025\\\/06\\\/income-statement-1.json&quot;}}\">\n\t\t\t\t\t<div class=\"lottie-animation__controls\">\n\t\t\t\t<button class=\"lottie-animation__control lottie-animation__control--play\">\n\t\t\t\t\t<span class=\"screen-reader-text\">Play animation<\/span>\n\t\t\t\t<\/button>\n\t\t\t\t<button class=\"lottie-animation__control lottie-animation__control--pause\">\n\t\t\t\t\t<span class=\"screen-reader-text\">Pause animation<\/span>\n\t\t\t\t<\/button>\n\t\t\t<\/div>\n\t\t\t<\/figure>\n<\/div>\n\n\n\n<p>An income statement comprises sections that cover:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Revenue<\/li>\n\n\n\n<li>Expenses<\/li>\n\n\n\n<li>Gains<\/li>\n\n\n\n<li>Losses<\/li>\n<\/ul>\n\n\n\n<p>The structure of the statement and lines of information included depends on the type of income statement and the type of company. <\/p>\n\n\n\n<p>For example, multi-step or single-step, and service-based or goods-based companies.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-the-following-key-components-are-contained-in-most-income-statements\"><strong>The following key components are contained in most income statements:<\/strong><\/h4>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-revenue\"><strong>Revenue<\/strong><\/h4>\n\n\n\n<p>Revenue, or sales\/income received is the first section on the statement and represents how much money the company earned from its primary business activity (goods or services). <\/p>\n\n\n\n<p>The amount shown here is before any costs or expenses are deducted.<\/p>\n\n\n\n<p>On a single-step income statement, other revenue can also be listed here, such as interest from investments under the Non-Operating Revenue line. <\/p>\n\n\n\n<p>On a multi-step, these would be shown after Operating Income (EBIT).<\/p>\n\n\n\n<p>Note that any extraordinary revenue is usually separated and listed under Below-The-Line items towards the end of the statement.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-cost-of-goods-sold-cogs\"><strong>Cost of Goods Sold (COGS)<\/strong><\/h4>\n\n\n\n<p>Cost of Goods is shown as a stand-alone section in the multi-step income statement, but not in a single-step statement. <\/p>\n\n\n\n<p>COGS includes all direct costs that relate to the production of goods, such as materials and direct labor.<\/p>\n\n\n\n<p>For a service-based company, COGS would cover items such as external contractors related to the service.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-gross-profit\"><strong>Gross profit<\/strong><\/h4>\n\n\n\n<p>Gross Profit is determined by a basic calculation of subtracting COGS from revenue.<\/p>\n\n\n\n<p>GP shows how much a company earns from its core business operation before operating expenses are factored in. <\/p>\n\n\n\n<p>Gross Profit can reflect how efficient a company is at managing its production costs<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-operating-expenses\"><strong>Operating expenses<\/strong><\/h4>\n\n\n\n<p>Expenses related to all business costs that are not COGS and not directly applied to the production of the goods or services.<\/p>\n\n\n\n<p>Operating expenses are costs necessary for general operations of the business, such as salaries of non-production staff, marketing expenses, and rent.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-depreciation-amp-amortization-expense\"><strong>Depreciation &amp; amortization expense<\/strong><\/h4>\n\n\n\n<p>Depreciation relates to the decrease in value of tangible assets in the company, such as buildings, machinery and equipment that over time will lose value due to wear and tear and age.<\/p>\n\n\n\n<p>This expense is calculated using various methods (like straight-line, declining balance, or units of production) that spread the cost of the asset over the expected duration of its useful life. <\/p>\n\n\n\n<p>The purpose of depreciation is to match the cost of an asset to the revenue it generates.<\/p>\n\n\n\n<p>Amortization relates to spreading the cost of intangible assets such as patents, copyrights, software, or goodwill. <\/p>\n\n\n\n<p>For example, a patent that is valid for ten years would be amortized by dividing the cost of the patent by ten. <\/p>\n\n\n\n<p>Each part of that cost would be charged over the ten-year period.<\/p>\n\n\n\n<p>Depreciation and amortization are essential to show an accurate financial view of a company by considering the cost of long-term assets.<\/p>\n\n\n\n<p>These expenses are also tax deductible and reduce the taxable income of the company.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-operating-income-ebit\"><strong>Operating income (EBIT)<\/strong><\/h4>\n\n\n\n<p>Operating income, or Earnings Before Interest and Taxes (EBIT) is calculated by subtracting operating expenses from gross profit.<\/p>\n\n\n\n<p>This number shows how much Gross Profit is consumed by Operating Expenses and reflects on the efficiency of the management team in running the company profitably.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-non-operating-revenues-expenses-gains-losses\"><strong>Non-operating revenues, expenses, gains, losses<\/strong><\/h4>\n\n\n\n<p>This line covers income from activities that are not part of a company&#8217;s primary business operations.<\/p>\n\n\n\n<p>Non-operating revenues might include income from investments, rental income, or gains from the sale of assets not used in the main line of business.<\/p>\n\n\n\n<p>Non-operating expenses cover costs such as interest paid on debt, losses from lawsuits, or losses on the disposal of assets.<\/p>\n\n\n\n<p>Gains and losses would come from events such as the sale of investment securities or real estate, foreign exchange differences, or restructuring costs.<\/p>\n\n\n\n<p>These items are listed on the income statement to show a distinction between the core business activities and incidental activity. <\/p>\n\n\n\n<p>This allows stakeholders to understand the company\u2019s operational efficiency and financial health from its regular business versus other sources.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-earnings-before-tax-ebt\"><strong>Earnings Before Tax (EBT)<\/strong><\/h4>\n\n\n\n<p>EBT or Pre-Tax Income relates to the income from the company&#8217;s main and other operations minus all expenses and before taxes are deducted. <\/p>\n\n\n\n<p>This is calculated by subtracting all operating expenses, interest expenses, and other relevant costs from total revenue.<\/p>\n\n\n\n<p>EBT is a starting point for calculating income tax expense and calculating net income. <\/p>\n\n\n\n<p>It\u2019s also a useful number to compare the profitability of companies in situations such as where tax rates differ.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-income-from-continuing-operations\"><strong>Income from continuing operations<\/strong><\/h4>\n\n\n\n<p>This line shows the profit after tax and the net income from the company\u2019s regular business activity.<\/p>\n\n\n\n<p>Income From Continuing Operations excludes profits or losses from discontinued operations, extraordinary items, and other non-recurring events.<\/p>\n\n\n\n<p>The figure shows the profitability and sustainability of the company&#8217;s primary business activities.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-below-the-line\"><strong>Below-the-line<\/strong><\/h4>\n\n\n\n<p>Below-The-Line items relate to any extraordinary costs for a business that are not a part of the core activities of the business.<\/p>\n\n\n\n<p>This section is highlighted on 3 rows:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Income from discontinued operations<\/strong> includes any goods or services that were discontinued during the accounting period and will cease to provide income moving forward.<\/li>\n\n\n\n<li><strong>Effect of accounting changes<\/strong> relates to any changes in accounting policy or tax laws during the period.<\/li>\n\n\n\n<li><strong>Extraordinary items<\/strong> include items such as paying a penalty to exit a contract.<\/li>\n<\/ul>\n\n\n\n<p>Below-The-Line items are shown as a separate line to avoid skewing the perception of the company\u2019s operational effectiveness and to show stakeholders earnings derived from core business operations.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-net-income\"><strong>Net income<\/strong><\/h4>\n\n\n\n<p>The bottom line of the income statement is net income, calculated by taking the operating income and adding\/subtracting any other income\/expenses. <\/p>\n\n\n\n<p>Taxes are then deducted to arrive at the net income, which represents the total profit or loss the company recorded during the period.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>One thing to remember is that an income statement doesn\u2019t show the difference between cash and non-cash items that have been received in the company or bought by the company. <\/p>\n\n\n\n<p>Some items might have been paid for on credit and the cash is yet to be received or paid.<\/p>\n\n\n\n<p>This means that the statement is not a reflection of how much money was actually received or how much cash is in the bank. <\/p>\n\n\n\n<p>Cash movements are shown in the cash flow statement.<\/p>\n\n\n<div class=\"lottie-animation\">\n\t<figure class=\"lottie-animation__figure\" data-sage-lottie-animation=\"{&quot;id&quot;:&quot;lottie-5a7f1a03-76e0-470b-bbe1-06328fa45455&quot;,&quot;playOn&quot;:&quot;pageLoad&quot;,&quot;loop&quot;:false,&quot;controls&quot;:true,&quot;speed&quot;:1,&quot;width&quot;:&quot;&quot;,&quot;mode&quot;:&quot;forward&quot;,&quot;animationData&quot;:{&quot;file&quot;:31147,&quot;src&quot;:&quot;https:\\\/\\\/www.sage.com\\\/en-us\\\/blog\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2025\\\/06\\\/income-statement-template-2.json&quot;}}\">\n\t\t\t\t\t<div class=\"lottie-animation__controls\">\n\t\t\t\t<button class=\"lottie-animation__control lottie-animation__control--play\">\n\t\t\t\t\t<span class=\"screen-reader-text\">Play animation<\/span>\n\t\t\t\t<\/button>\n\t\t\t\t<button class=\"lottie-animation__control lottie-animation__control--pause\">\n\t\t\t\t\t<span class=\"screen-reader-text\">Pause animation<\/span>\n\t\t\t\t<\/button>\n\t\t\t<\/div>\n\t\t\t<\/figure>\n<\/div>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-differences-in-income-statements-to-consider\">Differences in income statements to consider<\/h2>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-income-statement-or-statement-of-comprehensive-income\">Income statement or statement of comprehensive income?<\/h4>\n\n\n\n<p>A statement of comprehensive income can be presented as one single document, or as two separate statements that combine the income statement and a comprehensive income statement in consecutive statements.<\/p>\n\n\n\n<p>If presented as one statement, this is a single continuous statement of income.<\/p>\n\n\n\n<p>If presented as two separate statements, this includes an income statement and a separate statement of comprehensive income. <\/p>\n\n\n\n<p>In this case, the two statements are collectively known as the income statement.<\/p>\n\n\n\n<p>The statement of comprehensive income includes other revenue and expenses that have yet to be realized to provide a fuller picture of a company&#8217;s total financial performance.<\/p>\n\n\n\n<p>The purpose of this extended statement is to provide a more in-depth view of a company&#8217;s financial position. <\/p>\n\n\n\n<p>Some companies choose to produce a statement of comprehensive income either through regulation or to have a more in-depth analysis of their financial position.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-nature-or-function\">Nature or function?<\/h4>\n\n\n\n<p>In the income statement, the Operating Expenses can be categorized as either \u2018nature\u2019 or \u2018function\u2019.<\/p>\n\n\n\n<p>Each method gives a different perspective and can be more useful in certain types of financial analysis or for certain types of businesses.<\/p>\n\n\n\n<p>The choice between these two methods depends on the company&#8217;s reporting goals, the nature of its operations, and sometimes regulatory requirements.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Function <\/strong>relates to cost of sales, distribution costs and admin expenses. It provides insight into operational efficiency by showing how expenses relate to specific operational areas.<\/li>\n\n\n\n<li><strong>Nature <\/strong>relates to raw materials, wages and depreciation. It offers clarity about the actual economic elements impacting financial results.<\/li>\n<\/ul>\n\n\n\n<p>IFRS IAS 1 requires that an entity disclose the nature of expenses when the function of expense classification is used.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-single-step-or-multi-step-income-statement\">Single-step or Multi-step income statement?<\/h4>\n\n\n\n<p>An income statement can be presented in two ways, either single-step or multi-step. <\/p>\n\n\n\n<p>Both of these statements provide the net income, but are slightly different in the layout and detail provided.<\/p>\n\n\n\n<p>Single-step income statements are more straightforward, showing revenue and expenses with a simple one-step equation. <\/p>\n\n\n\n<p>These types of income statements are usually used by smaller businesses.<\/p>\n\n\n\n<p>A multi-step income statement provides a more detailed view by breaking down the operating revenues and expenses from the non-operating ones and highlighting several key components of financial performance such as gross profit, operating income, and net income.<\/p>\n\n\n\n<p>The multi-step format is preferred by larger companies or those with more complex business operations such as manufacturing or distribution companies.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-income-statement-templates\">Income statement templates<\/h2>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-how-to-use-the-income-statement-template\">How to use the income statement template<\/h4>\n\n\n\n<p><strong>Download the <a href=\"#gate-eaffa782-26d8-44b2-a97f-92ba8476b9bf\">income statement template here<\/a>.<\/strong><\/p>\n\n\n\n<p>In the template spreadsheet, there are two tabs. Select a multi-step or a single-step income statement based on your business size and needs.<\/p>\n\n\n\n<p>In the sheet, only input figures into the gray boxes where indicated. All other boxes have formula calculations and will automatically calculate for you.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-multi-step-income-statement\">Multi-step income statement<\/h3>\n\n\n\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;69f4c9c078e39&quot;}\" data-wp-interactive=\"core\/image\" data-wp-key=\"69f4c9c078e39\" class=\"wp-block-image size-large wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"422\" height=\"810\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on--click=\"actions.showLightbox\" data-wp-on--load=\"callbacks.setButtonStyles\" data-wp-on-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-multi-step-422x810.jpg\" alt=\"An image of a multi-step income statement template\" class=\"wp-image-23898\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-multi-step-422x810.jpg 422w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-multi-step-400x768.jpg 400w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-multi-step-768x1475.jpg 768w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-multi-step-800x1536.jpg 800w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-multi-step-1066x2048.jpg 1066w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-multi-step-scaled.jpg 1333w\" sizes=\"auto, (max-width: 422px) 100vw, 422px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\taria-label=\"Enlarge\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.imageButtonRight\"\n\t\t\tdata-wp-style--top=\"state.imageButtonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-select-a-reporting-period\"><strong>Select a reporting period<\/strong><\/h4>\n\n\n\n<p>At the top of the statement, input the year, quarter, or month period to compare. <\/p>\n\n\n\n<p>Copy and paste the column for additional periods.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-input-revenue\"><strong>Input revenue<\/strong><\/h4>\n\n\n\n<p>Input all revenue and sales. <\/p>\n\n\n\n<p>You can prepare a statement just for one area or product. <\/p>\n\n\n\n<p>Returns, Refunds and Allowances are input as a negative number.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-cost-of-goods-sold\"><strong>Cost of goods sold<\/strong><\/h4>\n\n\n\n<p>On the multi-step income statement, input the COGS divided into purchases, materials, labor and overhead related to the direct production of goods.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-gross-profit-0\"><strong>Gross profit<\/strong><\/h4>\n\n\n\n<p><strong>Gross profit<\/strong> is calculated by subtracting total cost of goods from total net revenue<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-operating-expenses-0\"><strong>Operating expenses<\/strong><\/h4>\n\n\n\n<p><strong>Operating expenses <\/strong>input all expenses into the relevant categories. You can add extra rows or rename rows as needed.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-operating-income-ebit-0\">Operating income EBIT<\/h4>\n\n\n\n<p><strong>Operating income EBIT<\/strong> is calculated from gross profit minus total operating expenses<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-non-operating-revenues-and-expenses\"><strong>Non-operating revenues and expenses<\/strong><\/h4>\n\n\n\n<p><strong>Non-operating revenues and expenses,<\/strong> input income from investments, rental income, or gains from the sale of assets not used in the main line of business, interest paid on debt, losses from lawsuits, or losses on the disposal of assets, events such as the sale of investment securities or real estate, foreign exchange differences, or restructuring costs.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-income-before-taxes-ebt\">Income Before Taxes (EBT)<\/h4>\n\n\n\n<p><strong>Income Before Taxes (EBT) <\/strong>is calculated by subtracting Non-operating revenues and expenses and interest expense from Operating income EBIT.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-income-from-continuing-operations-0\">Income from continuing operations<\/h4>\n\n\n\n<p><strong>Income from continuing operations<\/strong> is calculated by subtracting income tax expense from Income Before Taxes.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-below-the-line-items\"><strong>Below-the-line items<\/strong><\/h4>\n\n\n\n<p><strong>Below-the-line items, <\/strong>input in the following fields:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Income from discontinued operations <\/strong>input any goods or services that were discontinued during the accounting period and will cease to provide income moving forward.<\/li>\n\n\n\n<li><strong>Effect of accounting changes<\/strong> input any changes in accounting policy or tax laws during the period.<\/li>\n\n\n\n<li><strong>Extraordinary Items<\/strong> input any other irregular items such as paying a penalty to exit a contract.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-net-income-0\"><strong>Net income<\/strong><\/h4>\n\n\n\n<p><strong>Net income<\/strong> is calculated by adding together all Income from Continuing Operations and all Below-The-Line items.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-single-step-income-statement\">Single-step income statement<\/h3>\n\n\n\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;69f4c9c07a538&quot;}\" data-wp-interactive=\"core\/image\" data-wp-key=\"69f4c9c07a538\" class=\"wp-block-image size-large wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"525\" height=\"810\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on--click=\"actions.showLightbox\" data-wp-on--load=\"callbacks.setButtonStyles\" data-wp-on-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-single-step-525x810.jpg\" alt=\"An image of a single-step income statement template\" class=\"wp-image-23899\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-single-step-525x810.jpg 525w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-single-step-498x768.jpg 498w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-single-step-768x1185.jpg 768w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-single-step-995x1536.jpg 995w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-single-step-1327x2048.jpg 1327w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-single-step.jpg 1458w\" sizes=\"auto, (max-width: 525px) 100vw, 525px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\taria-label=\"Enlarge\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.imageButtonRight\"\n\t\t\tdata-wp-style--top=\"state.imageButtonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-select-a-reporting-period-0\"><strong><strong>Select a reporting period<\/strong><\/strong><\/h4>\n\n\n\n<p>At the top of the statement, input the year, quarter, or month period to compare. <\/p>\n\n\n\n<p>Copy and paste the column for additional periods.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-input-revenue-0\"><strong>Input revenue<\/strong><\/h4>\n\n\n\n<p>Input all revenue and sales into the appropriate row and delete as necessary for sales, services, or interest. <\/p>\n\n\n\n<p>Returns, refunds and allowances are input as a negative number.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-total-net-revenue\"><strong><strong>Total Net Revenue<\/strong><\/strong><\/h4>\n\n\n\n<p><strong>Total Net Revenue<\/strong> is calculated as a sum that adds all revenue and subtracts returns, refunds and allowances.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-operating-expenses-1\"><strong>Operating expenses<\/strong><\/h4>\n\n\n\n<p><strong>Operating expenses <\/strong>input all expenses into the relevant categories. You can add extra rows or rename rows as needed.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-net-income-before-taxes\"><strong>Net Income before Taxes<\/strong><\/h4>\n\n\n\n<p><strong>Net Income Before Taxes<\/strong> is calculated by subtracting Total Operating Expenses from Total Net Revenue.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-income-from-continuing-operations-1\"><strong><strong>Income from continuing operations<\/strong><\/strong><\/h4>\n\n\n\n<p><strong>Income from continuing operations<\/strong> is calculated by subtracting income tax expense from Income Before Taxes.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-below-the-line-items-0\"><strong>Below-the-line items<\/strong><\/h4>\n\n\n\n<p><strong>Below-the-line items, <\/strong>input in the following fields:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Income from discontinued operations <\/strong>input any goods or services that were discontinued during the accounting period and will cease to provide income moving forward.<\/li>\n\n\n\n<li><strong>Effect of accounting changes<\/strong> input any changes in accounting policy or tax laws during the period.<\/li>\n\n\n\n<li><strong>Extraordinary items<\/strong> input any other irregular items such as paying a penalty to exit a contract.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-net-income-1\"><strong>Net income<\/strong><\/h4>\n\n\n\n<p><strong>Net income<\/strong> is calculated by adding together all Income from Continuing Operations and all Below-The-Line items.<\/p>\n\n\n<div class=\"lottie-animation\">\n\t<figure class=\"lottie-animation__figure\" data-sage-lottie-animation=\"{&quot;id&quot;:&quot;lottie-e3b13f75-3a16-4326-916e-2bb195b0ab1e&quot;,&quot;playOn&quot;:&quot;pageLoad&quot;,&quot;loop&quot;:false,&quot;controls&quot;:true,&quot;speed&quot;:1,&quot;width&quot;:&quot;&quot;,&quot;mode&quot;:&quot;forward&quot;,&quot;animationData&quot;:{&quot;file&quot;:31148,&quot;src&quot;:&quot;https:\\\/\\\/www.sage.com\\\/en-us\\\/blog\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2025\\\/06\\\/income-statement-template-3.json&quot;}}\">\n\t\t\t\t\t<div class=\"lottie-animation__controls\">\n\t\t\t\t<button class=\"lottie-animation__control lottie-animation__control--play\">\n\t\t\t\t\t<span class=\"screen-reader-text\">Play animation<\/span>\n\t\t\t\t<\/button>\n\t\t\t\t<button class=\"lottie-animation__control lottie-animation__control--pause\">\n\t\t\t\t\t<span class=\"screen-reader-text\">Pause animation<\/span>\n\t\t\t\t<\/button>\n\t\t\t<\/div>\n\t\t\t<\/figure>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-faqs\">FAQs<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-do-all-businesses-have-to-produce-an-income-statement\">Do all businesses have to produce an income statement?<\/h3>\n\n\n\n<p>Even in cases where it is not legally required, maintaining an income statement is considered a best practice for effective business management.<\/p>\n\n\n\n<p>Almost all businesses are expected to produce an income statement, though the specific requirements can vary depending on the size of the business and its legal structure.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-publicly-traded-companies\"><strong>Publicly traded companies<\/strong><\/h4>\n\n\n\n<p>Public companies are legally required to produce an income statement, along with other financial statements such as the balance sheet and cash flow statement. Learn more about how to create a <a href=\"https:\/\/www.sage.com\/en-us\/blog\/cash-flow-statement-template\/\">cash flow statement with a free template<\/a> for you to download.<\/p>\n\n\n\n<p>These documents must be reported quarterly and annually and are regulated by government bodies such as the Securities and Exchange Commission (SEC) in the United States. <\/p>\n\n\n\n<p>SEC reporting companies must provide financial statements under US GAAP.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-private-companies\"><strong>Private companies<\/strong><\/h4>\n\n\n\n<p>Private companies are also expected to produce income statements, especially if they are of a certain size or have external stakeholders such as investors, lenders, or significant creditors. <\/p>\n\n\n\n<p>While the requirements might not be as stringent as for public companies, producing regular income statements is crucial for managing finances, making informed business decisions, and obtaining financing.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-small-businesses-and-sole-proprietorships\"><strong>Small businesses and sole proprietorships<\/strong><\/h4>\n\n\n\n<p>For smaller businesses or sole proprietorships, the legal requirements for producing an income statement can be less formal. <\/p>\n\n\n\n<p>However, having an income statement is still important for the owner to understand the business\u2019s financial performance, plan for taxes, and support any financing applications.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-non-profits\"><strong>Non-profits<\/strong><\/h4>\n\n\n\n<p>Non-profit organizations also need to produce an income statement, often referred to as a statement of activities.<\/p>\n\n\n\n<p>This statement shows how funds are sourced and used during the reporting period, which is crucial for accountability to donors, members, and regulatory bodies.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-startups\"><strong>Startups<\/strong><\/h4>\n\n\n\n<p>Startups, while not immediately required from a regulatory perspective to produce formal income statements, often need to prepare these financial statements to secure funding from investors or banks and to monitor their burn rate and path to profitability.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Income statement or balance sheet?<\/h2>\n\n\n\n<p>An income statement represents a period of time, for example, a financial quarter or year. <\/p>\n\n\n\n<p>A balance sheet is a snapshot of a fixed point in time.<\/p>\n\n\n\n<p>An income statement and a balance sheet are 2 fundamental financial statements used in business, but they serve different purposes and present different types of financial information.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-income-statement\"><strong>Income statement<\/strong><\/h4>\n\n\n\n<p>An income statement measures a company\u2019s financial performance over a specific period\u2014usually a quarter or a year. <\/p>\n\n\n\n<p>It focuses on the company&#8217;s revenues, expenses, and profits or losses during the reporting period. <\/p>\n\n\n\n<p>The primary purpose of the income statement is to showcase how the revenues are transformed into net income (or net loss) by deducting all expenses from the total revenue. <\/p>\n\n\n\n<p>This includes operating expenses, cost of goods sold, taxes, and other expenses. <\/p>\n\n\n\n<p>It provides a dynamic view of the business operations, indicating how well the company can generate profit from its operations.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-balance-sheet\"><strong>Balance sheet<\/strong><\/h4>\n\n\n\n<p>In contrast, the balance sheet provides a snapshot of a company\u2019s financial condition at a particular point in time, detailing what the company owns (assets) and owes (liabilities), along with the equity held by shareholders. <\/p>\n\n\n\n<p>The balance sheet is structured around the fundamental equation:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-assets-liabilities-shareholders-equity\"> Assets = Liabilities + Shareholders\u2019 Equity. <\/h4>\n\n\n\n<p>It provides critical information on a company\u2019s liquidity, solvency, and capital structure and is vital for assessing the company&#8217;s financial stability and capability to handle its obligations.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>Together, the income statement and balance sheet provide a comprehensive view of a company&#8217;s financial health, each from a different perspective but both are essential for a complete financial analysis.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-what-is-the-difference-between-operating-revenue-and-non-operating-revenue\">What Is the difference between operating revenue and non-operating revenue?<\/h3>\n\n\n\n<p>Operating revenue relates to monies received for the company\u2019s core activity, such as the sale of products or services.<\/p>\n\n\n\n<p>Non-operating revenue refers to other sources of income such as interest income from capital held in a bank or income from rental of business property.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-differences-between-us-gaap-and-ifrs\">The differences between US GAAP and IFRS<\/h3>\n\n\n\n<p>IFRS and GAAP standards for income statement presentation are similar.<\/p>\n\n\n\n<p>However, they have some important differences, including:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-layout\"><strong>Layout<\/strong><\/h4>\n\n\n\n<p>Neither GAAP nor IFRS requires a specific layout for income statements. <\/p>\n\n\n\n<p>However, companies using IFRS must include a list of minimum line items. U.S.-based public companies must follow <a href=\"https:\/\/www.ecfr.gov\/current\/title-17\/chapter-II\/part-210\" target=\"_blank\" rel=\"noreferrer noopener\">SEC Regulation S-X<\/a>, which has strict format and minimum line item requirements.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.sage.com\/en-us\/accounting-software\/\" target=\"_blank\" rel=\"noreferrer noopener\">Automated accounting software<\/a> is particularly useful for generating income statements that comply with multiple accounting standards. By reducing the need for manual data entry, it minimizes errors\u2014especially when income statements must be produced regularly for different regulatory frameworks.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-expenses-classification\"><strong>Expenses classification<\/strong><\/h4>\n\n\n\n<p>IFRS allows companies to classify expenses based on function or nature. <\/p>\n\n\n\n<p>If they opt for function, they must disclose the nature of expenses in the income statement notes. GAAP doesn&#8217;t have specific requirements.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-unusual-or-exceptional-items-classification\"><strong>Unusual or exceptional items classification<\/strong><\/h4>\n\n\n\n<p>IFRS doesn&#8217;t have a definition for unusual or exceptional items and doesn&#8217;t allow companies to present or disclose items using these terms. <\/p>\n\n\n\n<p>In contrast, GAAP defines unusual transactions as those that are highly abnormal and unrelated to the company&#8217;s typical activities. <\/p>\n\n\n\n<p>GAAP allows companies to present these items separately or disclose them in the notes.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-discontinued-operations\"><strong>Discontinued operations<\/strong><\/h4>\n\n\n\n<p>IFRS allows this classification for components that are already disposed of or held for sale if the component constitutes a major line of business, is part of a plan to dispose of a major line of business, or is a subsidiary acquired for resale purposes. <\/p>\n\n\n\n<p>GAAP allows this classification for components that are either disposed of or held for sale and that will have a significant impact on the company&#8217;s operations and financial performance.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>Sage <a href=\"https:\/\/www.sage.com\/en-us\/accounting-software\/financial-reporting\/\" target=\"_blank\" rel=\"noreferrer noopener\">financial reporting software<\/a>&nbsp;can help with your reporting and the management and growth of your business.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.sage.com\/en-us\/sage-business-cloud\/intacct\/\">Sage Intacct<\/a> has 150 built-in financial reports enabling you to easily create custom reports and leaving you with more time to focus on your business.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><em>Editor&#8217;s note: This article was verified by a US-based Certified Public Accountant (CPA). Accounting rules are complex and change frequently and we recommend you seek any accounting advice from a qualified CPA.<\/em><\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Income Statement Template<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p>Download your free income statement templates<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"##gate-eaffa782-26d8-44b2-a97f-92ba8476b9bf\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"525\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-single-step-1-525x810.jpg\" class=\"single-cta__image\" alt=\"A screenshot of a income statement template\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/07\/income-statement-example-single-step-1-525x810.jpg 525w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The income statement is one of the core financial statements for a business. <\/p>\n<p>Download an income statement template with multi-step and single-step variations.<\/p>\n","protected":false},"author":1774,"featured_media":9403,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[43],"tags":[110,34],"business_type":[40],"lilypad":[],"context":[],"industry":[],"persona":[150,96,97,95],"imagine_tag":[],"coauthors":[509],"class_list":["post-23890","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-accounting-101","tag-small-business","business_type-small-business"],"sage_meta":{"region":"en-us","author_name":"Yassir Malik","featured_image":"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1279589946.jpg","imagine_tags":[]},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/23890","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/1774"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/comments?post=23890"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/23890\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media\/9403"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=23890"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/categories?post=23890"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=23890"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/business_type?post=23890"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/lilypad?post=23890"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/context?post=23890"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/industry?post=23890"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/persona?post=23890"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/imagine_tag?post=23890"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/coauthors?post=23890"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}