Income Statement Notes

Income statement format

At the very top, it'll be the company name:

Joon Kang Company

Then, it'll state the name of the statement:

Income Statement

Finally, the time period it's referring to:

For the year ended Dec 31, XXXX

So put all together, it'll look like this at the top:

Joon Kang Company

Income Statement

For the year ended Dec 31, XXXX

This is for most business, but there are two types of years:

Calendar Year:

This is a straightforward Jan 1, Yr1 to Dec 31, Yr 2, e.g. Jan 1, 2008 to Dec 31, 2008.

Fiscal Year:

Not all businesses operate on a calendar year, due to peak season, for example (in the retail industry), so they may want to close their books at the end of that season. If, for example, the Fiscal year ends at the end of October: Nov 1, Yr1 to Oct 31, Yr2 (the reason it's year 2, is because it goes into the next calendar year). For example, the NBA basketball season starts around November or so and ends in May or June, so they refer to the season as the 2002/2003 season.

The main question for Income Statements: Is there a net profit or net loss?

Revenue - Expenses = Net Income or (Net Loss) -> Net loss always placed in parenthesis.

If Income > Expenses = Net Profit

If Expenses > Income = Net Loss

I know it's simple but...

Hope this was a little helpful

Joon