The income statement is a document that is encrypted in the form of a table which reflects both the function and operation of the business. Specifically, this component figures in two columns: these are the expenses and income that are commonly known as management accounts. Thus, from a number of calculations on these elements, and through the application of conventional formulas, one can identify the range in value of the activity of the company.


Roughly speaking, the result is simply the balance of these accounts management. This value is calculated over a given period, often a year or a year, etc. There are two kinds of results: adjusted earnings and net income. In this paper, we will inform you of the progress of the calculations of each of these two types of results, starting by defining each account management comes in.

The charges

Usually displayed in the left column of the table representing the income statement of the company (the flow), the charges register as permanent jobs corresponding to a decrease in its assets. In other words, these are the goods and services consumed during the year. They consist of purchases of goods stored and not stored, plus changes in inventories of goods, purchases of raw materials and other supplies, changes in inventories of raw materials and other supplies, other purchases and external services. Besides shopping, there also charges taxes and duties of operations, personnel costs (salaries, wages, payroll taxes, etc), The depreciation and operating provisions, and also all other expenses operations.


The products are the resources saved in the right column of the income (credit). They represent an enrichment of the company, they include the number of sales or net sales of the company, production stored, capitalized production, operating subsidies, the depreciation, amortization and provisions, and finally other operating income.

The calculation of

As already stated above, there are two steps in calculating earnings after which we deduce respectively the current result of the company and its bottom line. The general point of view, the result obtained by subtracting the sum of the charges between the goods. But to have a more concrete vision of the fate of the company’s business during a given year, the continental European practices differentiated the current result of net income. The first excluded in calculating the results obtained after exceptional items (extraordinary entrenched special charges), as well as employee participation in company results and income taxes. For cons, the net result that will be as net income or net loss is obtained by successively introducing these special items in a cascading series of calculations.