Understanding Income Statement
Income Statement component and format
Net Revenue = Revenue - adjustments (e.g, cash discounts, volume discounts, or estimated returns)
By nature(Single Step) or By function(Multi Step)
- By nature: depreciation expense are displayed in one account regardless of whether they come from manufacturing or administration.
-
By function: Cost of good sold is composed of all manufacturing costs, such as raw materials, depreciation, labor, etc
Income statement format and components
Common - Size I/S 百分比法
使用百分比，是因为人对极大或极小数字不敏感。通过百分比发，可以看出哪些是重大科目，哪些科目发生了重大变化。在I/S中，一般使用revenue销售收入作为分母
几个同义概念
- Sales, revenue, top line
- net profit, net income, net earning, bottom line
- operating profit, income, EBIT
Revenue recognition
- 收入能够可靠计量
- 收款确定
- 货物交割、服务提供
- 成本可以可靠计量/双方有协议
