Glossary
P&L statement
Meaning & Definition
A P&L statement (Profit & Loss Statement) is a financial report that summarizes a company’s revenues, costs, and expenses over a specific period to determine whether the business earned a profit or incurred a loss. It helps management understand financial performance, control expenses, assess profitability, and make informed business decisions.
Important Features of P&L Statement
- Shows the business’s revenue and expenses.
- Helps determine overall profit or loss.
- Supports financial planning and budgeting.
- Helps identify areas of excessive spending.
- Assists management in evaluating business performance.
- Provides useful information for financial decision-making.
Legal Considerations
- Companies incorporated under the Companies Act, 2013 are generally required to prepare financial statements, including a statement of profit and loss, in accordance with applicable accounting requirements.
- Financial statements must comply with applicable Accounting Standards or Ind AS, depending on the company and applicable requirements.
- Companies may also be required to have their financial statements audited and filed with the Registrar of Companies (ROC) as prescribed under applicable law.
