Financial Accounting for Managers, 3rd Edition

5

Statement of Profit and Loss

CHAPTER OBJECTIVES

This chapter will help the readers to:

• Understand the contents of statement of profit and loss in depth.
• Appreciate the issues involved with accrual of expenses.
• Prepare the statement of profit and loss as per the requirements of the Companies Act, 2013.
• Differentiate various measures of profits—gross profit, operating profit, pre-tax profit and
• net profit.
• Calculate and interpret basic earnings and diluted earnings per share.
• Appreciate the requirements of applicable accounting standards—Ind AS 12 (income taxes), Ind AS 19 (employees benefits), Ind AS 23 (borrowing costs), Ind AS 33 (earnings per share), Ind AS 102 (share based payment) and Ind AS 105 (discontinuing operations).

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