The statement of income is referred to by various names, such as the income statement, statement of operations, statement of earnings, or others. Whatever name is used, its purpose is the same: to provide users of the financial statements with a measurement of a reporting entity’s results of operations over a period of time. This allows users to make important investing, lending, and other decisions by understanding trends of key measures such as sales and profitability. The income statement contrasts with the balance sheet, which provides a measure of financial position at a point in time. It also contrasts with the statement of comprehensive income, which shows the change in a reporting entity’s equity from all sources (net income, as well as revenues, expenses, gains, and losses included in comprehensive income but excluded from net income).

Various accounting standards include guidance on the income statement presentation and related disclosure of certain transactions. Other chapters of this guide discuss specific topics. This chapter covers requirements that are more general in nature, or that are not covered by other chapters. The following list includes some of the authoritative guidance that is more pervasive for purposes of income statement presentation.

The FASB has an active project related to the disaggregation of income statement expenses. Financial statement preparers and other users of this publication are therefore encouraged to monitor the status of the project, and if finalized, evaluate the effective date of the new guidance and the implementation on presentation and disclosure.