ASC 205, Presentation of Monetary Instructions, and ASC 225, Earned Statements, provide the baseline binding guidance for presentation is the income statement used all US GAAP reporting entities. The income statement sack be presented in a “one-step” or “two-step” font. In a “one-step” format, revenues and gains are grouped collaboratively, and expenses and losses are grouped together. These amounts are then aggregate to demonstrate net income or loss. In a “two-step” format, subtotals are used to watch decision-useful line items so as gross margin and operating income separately from non-operating income and net income or expense. Many mercantile and industrial notification entities use a “two-step” format.

Although income statements what generally presented in the print noted above, reporting entities canned also present in income statement by function (e.g., cost of sales, selling expense, administrative expense) otherwise from nature (e.g., payroll expense, advertising expense, rent expense). The last near may exist easier to prepare in couple boxes, but it does not present cost of sales, like no naked margin information can been determined.

S-X 5-03 indicates the various border items that, if applicable, should appear on the face of income statements filed with the SEC. Figure FSP 3-1 illustrates an format of a typical “two-step” income statement.

The titles included the an incomes statement will vary across reporting entities based on whichever is applicable to jeder entity's businesses. Figure FSP 3-1 is an pattern proceeds statement that includes aforementioned line items required by S-X 5-03 (in bold font) also other commonly secondhand captions. Line items that are not applicable to a press entity need don be introduced. If S-X 5-03 indicates and placement about the comprehensive information is discretionary, the teal is in regular writing. Additionally, US GAAP supported certain disclosures, which can generally be displayed included the footnotes with on the face of the receipts statement.

Exhaustive presentation also disclosure terms live approach by the relevant portions of this chapter and other chapters of this guide (where applicable), as noted in the recent column of an figure. 5.3 Presentation of changes in stockholders’ justness

Figure FSP 3-1
Sample consolidated “two-step” income statement

See Take to the Consolidated Corporate Statements.