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Important inclusions in an income statement for our business accounting in Melbourne

In business accounting in Melbourne, we define an income statement as a financial statement that summarises a company’s revenue and expenses over a period of time. An income statement, also known as a statement of comprehensive income can come in two forms; A single step statement or a multi-step statement. Our Melbourne small business accountant has detailed what is included in both forms below:

Single Step Statements
In a single step statement, our small business accountants in Melbourne CBD help clients calculate total revenues and total expenses in order to determine net income in a one step subtraction. The advantage of this is that it is simple and easy to understand.

Multi Step Statements
Multi Step Statements calculate income by grouping certain revenues, expenses together and help our Melbourne small business accountants calculate different sub totals of income. These subtotals include:

• Gross profit – the difference between revenue and the cost of making a product or providing a service.

• Profits before income tax expense – Also called earnings before tax, is the profit generated when considering revenues and expenses.

• Other comprehensive income – includes movements in equity that are not part of the realised gains or losses in profits. E.g. unrealised gains, losses in foreign exchange contracts, cash hedge.

For more information regarding the inclusions in an income statement, please contact our professionals in business accounting in Melbourne.