Income Statement - Industrial/Commercial Format

This is a hybrid statement for Industrial/Commercial companies that incorporates Cost of Goods Sold, Purchase and other formats.

For U.S. currency reports, the native currency is translated using a period-average rate covering the 12 months within a company's fiscal year.

Item Definitions

Appropriations to Untaxed Reserves
This item represents yearend allocations from income to untaxed reserves held as long-term liabilities on the Balance Sheet. Under national tax regulations, some countries allow these reserves to strengthen the company’s financial position by deferring taxes.
This item is a component of Net Income.
This item excludes appropriations to reserves (included in Shareholders’ Equity).
This item includes movement to and from provisions before taxes.

Austria   This item includes

  1. Investment reserve according to Article 9 of the Income Tax law (Investitionsrücklage gemäß § 9 Einkommensteurergestz (EStG])
  2. Tax–deductible investment reserve according to Article 10 of the Income Tax law (Investitionsrücklage gemäß § 10 Einkommensteurergestz (EStG])

This item excludes

  1. Free reserves (Freie Rücklagen)
  2. Statutory reserves (gestzliche Rücklagen)

Finland   This item includes

  1. Extraordinary funding of pension scheme
  2. Inventory reserve
  3. Investment reserve
  4. Operating reserve
  5. Other untaxed reserves

Germany   This item includes

  1. Reserves according to Article 35 of the Income Tax Guideline (Rücklagen gemäß Abschnitt 35 Einkommensteuer –Richtlinien [EStR])
  2. Reserves according to Section 1 of the Developing Countries Tax Law (Rücklagen gemäß § 1 Entwicklungsländer–Steuergesetz)
  3. Reserves according to Section 3 of the Foreign Investment Law (Rücklagen gemäß § 3 Auslandsinvestitionsgesetz)
  4. Reserves according to Sections 6b and 7c of the Income Tax Law (Rücklagen gemäß § 6b und § 7c Einkommensteuergesetz [EStG])
  5. Reserves according to Section 52, Article 5 of the Income Tax Law (Rücklagen gemäß § 52 Abschnitt 5 Einkommensteuergesetz [EStG])
  6. Reserves according to Section 74 of the Income Tax Regulations (Rücklagen gemäßl § 74 Einkommensteuer– Durchführungs–Verordnung [EStDV])

Japan   This item excludes the effect of accumulated tax–allowed reserves on the Income Statement. From 1984 forward, this item and Reserves – Untaxed contain zeros. In prior years, these items may contain either numbers or zeros.

Some Japanese companies presenting parent company accounts continue to report untaxed reserves and the related effects on the Income Statement. For these companies, the relevant items may contain either numbers or zeros.

When reported, this item includes

  1. Excess depreciation
  2. Overseas investment loss
  3. Overseas market development

Norway   This item includes

  1. Allocation to pension fund
  2. Capital reserve
  3. Classification reserve
  4. Conditional tax–exempt allocations (betinget skattefrie avsetninger)
  5. Consolidation fund (konsolideringsfond)
  6. Extraordinary depreciation
  7. Inventory tax reserve
  8. Investment reserves (anleggsreserver)
  9. Other tax–related reserves
  10. Profits on sales allocated conditionally
  11. Regional development fund (distriktsutbyggingsfond)
  12. Reserve for environmental protection

Sweden   This item includes

  1. Consolidation reserves
  2. Depreciation in excess of plan (avskrivningar utover plan)
  3. Development reserves (förnyelsefonder)
  4. Exchange reserves (valutakursreserver)
  5. General/statutory and special investment reserves
  6. Internal profit reserve
  7. Inventory reserves (lagerrserver)
  8. Renewal reserves
  9. Reserves for contingencies
  10. Statutory renewal reserves

Capitalized Costs
This item represents capital outlays originally charged as operating expense and capitalized from operating expense to an asset account.
This item is a component of Operating Expense on Income Statement Model Numbers 02 and 05.
This item excludes capitalized interest (included in Interest Capitalized).
This item contains a Not Available data code (@NA) on Income Statement Model Numbers 01, 03, and 04.
This item contains a Not Available data code (@NA) on Income Statement Model Number 02 (Purchase Format) when capitalized costs are not reported.

Change in Stocks
This item represents the change in value between opening and closing inventories/stocks balances.
This item is a component of Operating Expense on Income Statement Model Numbers 02 and 05.
This item excludes valuation changes in raw materials (included in Raw Materials, Supplies, and Merchandise).
This item contains a Not Available data code (@NA) on Income Statement Model Numbers 01, 03, and 04.

Cost of Goods Sold
This item represents aggregate expenses directly related to purchasing merchandise or manufacturing goods subsequently withdrawn from finished goods inventory and sold to customers.
This item is a component of Operating Expense on Income Statement Model Numbers 01 and 05.

This item excludes

  1. Amortization of intangibles (included Depreciation and Amortization – Total)
  2. Amortization of negative intangibles (included in Nonoperating Income (Expense) – Other)
  3. Depreciation allocated to cost of goods sold (included in Depreciation and Amortization – Total)
  4. Excise taxes (when excluded from Net Sales – Total) (included in Excise Taxes)
  5. Foreign exchange adjustments reported before income taxes (included in Nonoperating Income [Expense] – Other)
  6. Idle plant expense (included in Nonoperating Income [Expense] – Other
  7. Purchase discounts received (included in Operating Expense – Other)

This item contains a Not Available data code (@NA) on Income Statement Model Numbers 02, 03, and 04.

Canada, United States   When reported separately, this item includes

  1. Amortization of deferred costs
  2. Extractive industries’ lease and mineral rights charged off and development costs written off
  3. Freight–in
  4. Insurance and safety
  5. Licenses
  6. Maintenance and repairs
  7. Motion picture companies’ amortization of film expense
  8. Pension costs for manufacturing companies
  9. Rent and royalty expense
  10. Salary expense
  11. Supplies
  12. Taxes (other than income taxes)
  13. Terminals and traffic
  14. Transportation
  15. Warehouse expense

This item excludes any item included by the company in Selling, General, and Administrative Expense.

Depreciation and Amortization – Total
This item represents total noncash changes to income for the gradual, systematic reduction of the actual cost or other basic value of tangible or intangible assets over their estimated useful lives.
This item is a component of Income (Loss) Before Income Taxes Pretax Income Appropriations.

This item is the sum of:

  1. Amortization of Intangibles
  2. Depreciation of Fixed Assets (Tangible)

This item includes

  1. Amortization of intangible assets (goodwill, patents, etc.)
  2. Depletion charges
  3. Depreciation of tangible fixed assets

This item excludes

  1. Amortization of deferred charges (included in Cost of Goods Sold or Operating Expense – Other)
  2. Depreciation on tangible fixed assets not used in operations (included in Nonoperating Income [Expense] – Other)

Extraordinary Items
This item represents unusual after–tax items reported by the company as extraordinary or exceptional, presented after net income from continuing operations.

This item includes

  1. Adjustments applicable to prior years (when reported as extraordinary)
  2. Cumulative effect of accounting changes
  3. Exceptional items reported after taxes
  4. Income (loss) from operations of a discontinued division
  5. Gain (loss) on disposal of a discontinued division
  6. Special items reported after taxes
  7. Tax carry forwards or carry backs

This item excludes

  1. Equity in earnings of an unconsolidated subsidiary reported after taxes (included in Equity in Earnings – After–tax)
  2. Exceptional items reported before taxes (included in Nonoperating Income [Expense] – Other)

Australia   This item includes

  1. Gain (loss) on sale of fixed assets and investments
  2. Write–offs of goodwill in first year

Canada   This item includes

  1. Adjustments applicable to prior years
  2. Discontinued operations
  3. Flood and fire losses
  4. Gain (loss) on extinguishment of debt
  5. Gain (loss) on repurchase of debentures
  6. Write–downs of long-term investment

France   This item includes large asset write–downs.

Japan  This item may include all nonoperating items.

Sweden   This item includes

  1. Exchange gain (loss)
  2. Gain (loss) on sale of fixed assets
  3. Plant closure costs
  4. Share and bond issue expense

United Kingdom   This item includes

  1. Disposals and closures of operations
  2. Expropriation of assets
  3. Gain (loss) from disposal of discontinued segments
  4. Write–downs of long-term investments

United States   This item includes

  1. Adjustments applicable to prior years
  2. Discontinued operations
  3. Flood and fire losses
  4. Gain (loss) on extinguishment of debt
  5. Gain (loss) on repurchase of debentures
  6. Write–downs of long-term investments

Income (Loss) Before Income Taxes Pretax Income Appropriations
This item represents net operating and nonoperating income. It is reported before appropriations to untaxed reserves, income taxes, minority interest, net items, and extraordinary items.
This item is a component of Net Income.

This item is the sum of:

  1. Nonoperating Income (Expense) – Total
  2. Operating Income
    less:
  3. Interest Expense – Total

Austria, France, Germany, Spain   This item may be calculated for companies using a production cycle Income Statement in which net income is the difference between net assets at the beginning and end of each year.

Income Taxes – Total
This item represents all taxes imposed on income by local, provincial/state, national, and foreign governments.
This item is a component of Net Income.

This item is the sum of:

  1. Income Taxes – Current
  2. Deferred Taxes (Income Account)
  3. Income Taxes – Other

This item includes

  1. Charges in lieu of income taxes
  2. Deferred income taxes
  3. Income taxes on dividends or earnings of unconsolidated subsidiaries
  4. Other income taxes
  5. Territorial income taxes

This item excludes

  1. Franchise taxes (included in Operating Expense – Other)
  2. Other taxes (included in Operating Expense – Other)
  3. Tax carry backs and tax carry forwards reported after net income (included in Extraordinary Items)

Canada   This item includes

  1. Charge equivalent to income tax credit
  2. Large corporations tax

France   This item includes profit sharing tax (I’impot sur Ia participation aux bénéfices).

Japan   This item includes enterprise tax (when no breakout is available).

This item excludes enterprise tax (when a breakout is available) (included in Selling, General, and Administrative Expense).

Malaysia   This item includes development tax.

Norway  This item includes capital tax.

South Africa  This item includes

  1. Mining tax
  2. Payments to a lessor trust

Spain  When the company considers corporate taxes as a distribution of income rather than an expense, this item contains a Not Available data code (@NA). When no taxation is reported, this item contains a zero.

Sweden  This item includes profit sharing tax.

Switzerland  Companies occasionally report income taxes as an unquantified amount in other expenses. When no breakout is available, this item contains a Combined Figure data code (@CF).

United Kingdom  This item excludes Petroleum Revenue Tax (included in Operating Expense – Other).

United States  This item includes

  1. Charge equivalent to investment tax credit
  2. State income taxes

Interest and Dividend Income – Total
This item is also referred to as Interest and Related Income.
This item represents revenue received from interest–bearing obligations, investments, and other financial assets held by the company.
This item is a component of Nonoperating Income (Expense) – Total.

This item includes

  1. Dividends
  2. Other financial income (when no breakout is available)

This item excludes capitalized interest (included in Interest Capitalized).

This item contains a Combined Figure data code (@CF) when:

  1. The company reports long– or short-term debt on the Balance Sheet but doesn’t report an amount for interest expense
  2. Interest and related expense is net of Interest Income (included in Interest and Related Expense)
  3. Interest and related income is combined with another item (included in Nonoperating Interest [Expense])

This item includes interest received and dividends received for non–North American countries.

Canada   This item excludes dividends and other financial income (included in Nonoperating Income [Expense] – Other)

France   When reported as financial income, this item includes

  1. Profits on sale of financial assets (produits nets sur cessions de valeurs mobilères de placement)
  2. Release of financial provisions (reprises sur provisions)

Germany   This item includes income from unconsolidated subsidiaries and associated companies (Ertäge aus Beteiligungen).

United States   This item excludes dividends and other financial income (included in Nonoperating Income [Expense] – Other).

Interest Capitalized
This item represents interest charges deferred to the company’s fixed and current assets amortized over the life of the related assets.
This item is a component of Nonoperating Income (Expense) – Total.
This item excludes capitalized costs (included in Capitalized Costs).

Interest Expense – Total
This item represents the company’s gross periodic expense in securing long– and short-term debt.
This item is a component of Pretax Income.

This item includes

  1. Amortization of debt discount or premium
  2. Debt issuance expense (such as, underwriting fees, brokerage costs, advertising costs)
  3. Discount on the sale of receivables of a finance subsidiary
  4. Factoring charges (unless included in operating expense)
  5. Finance charges
  6. Financing charges for finance leases
  7. Interest expense on both long– and short-term debt
  8. Interest on customer advances
  9. Other financial expenses (when no breakout is available)
  10. Retail companies’ interest expense (net of interest income of unconsolidated finance subsidiaries)

This item excludes

  1. Cash discounts reported by the company as financial expense (included in Nonoperating Income [Expense] – Other)
  2. Interest and related income (included in Interest and Dividend Income – Total)
  3. Interest capitalized (included in Interest CapitaIized)

This item includes expenses incurred in raising or managing funds for non–North American companies.

France  When reported as financial expense, this item includes

  1. Changes to provisions against financial assets (dotations financières aux amortissements et provisions)
  2. Losses on sale of financial assets (charges nettes sur cessions de valeurs mobilières de placement)

Minority Interest (Income Account)
This item represents the portion of a consolidated subsidiary’s income applicable to capital not owned by the parent company.
This item is a component of Net Income.

This item includes

  1. Minority share of group income
  2. Subsidiary preferred dividends

This item contains a Combined Figure data code (@CF) when minority interest is reported on the Balance Sheet but no breakout is available on the Income Statement.

Net Income
This item represents income after the deduction of all expenses, including allocations to untaxed Balance Sheet reserves (if applicable), income taxes, minority interest, and net items, but before extraordinary items and provisions for dividends.

This item is the sum of:

  1. Income (Loss) Before Income Taxes Pretax Income Appropriations
  2. Net Items – Total
    less:
  3. Appropriations to Untaxed Reserves
  4. Income Taxes – Total
  5. Minority Interest (Income Account)

Austria   This item is adjusted to reflect income prior to allocations to/from free reserves (freie Rucklagen) and statutory reserves (gestzliche Rucklagen).

Germany   This item excludes

  1. Profit (loss) carried forward from prior periods
  2. Transfers or allocations to various equity reserves

Net Items – Total
This item represents all accounts reported after taxes that are not extraordinary exceptional items, discontinued operations, or minority interest.
This item is a component of Net Income.

This item is the sum of:

  1. Equity in Earnings – After–tax
  2. Net Items – Other
  3. Preacquisition Profits

This item excludes

  1. Extraordinary items (included in Extraordinary Items)
  2. Minority interest (included in Minority Interest (Income Account))

Canada, United States   This item contains an amount only when equity in earnings is reported after taxes.

Net Sales – Total
This item represents gross sales reduced by cash discounts, trade discounts, returned sales, excise taxes, and value–added taxes and allowances for which credit is given to customers.
This item is a component of Operating Income.

This item includes

  1. Advertising companies’ net sales or commissions earned
  2. Airline companies’ net mutual aid assistance and federal subsidies
  3. Any external operating revenue source expected to continue for the life of the company
  4. Equipment rental income
  5. Franchise fees
  6. Hospitals’ sales net of provision for contractual allowances
  7. Leasing companies’ rental or lease income
  8. License fees
  9. Management fees
  10. Retail companies’ sales of leased departments (when corresponding expenses are reported in the Income Statement and no breakout is available)
  11. Royalty income (when included in operating revenues)
  12. Shipping companies’ operating differential subsidies and income on reserve fund securities (when a breakout is available)

This item excludes

  1. Capitalized costs (included in Capitalized Costs for companies using Income Statement Model Number 02 [Purchases Format])
  2. Effects of excise taxes and value–added taxes (when not reported on the Income Statement) (included in Cost of Goods Sold or Operating Expense – Other)
  3. Equity in earnings of unconsolidated subsidiaries (included in Nonoperating Income [Expense] – Other)
  4. Interest income (included in Interest and Related Income)
  5. Nonoperating income (included in Nonoperating Income [Expense]– Other)
  6. Other operating income (included in Nonoperating Income [Expense] – Other)
  7. Rental income (included in Nonoperating Income [Expense] – Other)

Nonoperating Income (Expense) – Other
This item represents nonoperating income (expense) not classified elsewhere on the Income Statement.
This item is a component of Net Income.
This item includes

  1. Amortization and provisions on financial assets
  2. Amortization of negative intangibles
  3. Cash discounts classified as financial expense
  4. Depreciation and amortization of unconsolidated subsidiaries (when reported as a separate item on the Income Statement)
  5. Depreciation of tangible fixed assets not used in operations
  6. Equity in earnings (when reported before taxes)
  7. Exceptional or special items (when reported before taxes)
  8. Foreign exchange gain (loss) (when reported before taxes)
  9. Gain (loss) on sale of fixed assets and investments
  10. Idle plant expense
  11. Other incidental income (expense)
  12. Provisions made against fixed asset investments
  13. Rental income
  14. Write–offs of intangible assets

Canada   This item includes

  1. Amortization of deferred credit
  2. Discount of receivables sold (factoring)
  3. Discount on debt reacquired
  4. Dividend and other financial income
  5. Franchise income (when corresponding expenses are not reported on the Income Statement)
  6. Royalty income
  7. Sales of leased departments (when a breakout of corresponding expenses is available)

Germany   This item includes

  1. Income from profit and loss transfer agreements (Erträge aus Gewinn Abführungsvertragen)
  2. Losses absorbed under existing profit and loss transfer agreements (Aufwendungen aus Verlustübernahme)

This item excludes

  1. Income from reversal of accrued liabilities or provisions (Erträge aus der Auflösung von Rückstellungen) (included in Operating Expense – Other)
  2. Income from unconsolidated subsidiaries and associated companies (Erträge aus Beteiligungen) (included in Interest and Related Income)
  3. Other expenses (sonstige Aufwendungen) (included in Operating Expense – Other)
  4. Other income (sonstige Erträge) (included in Operating Revenues – Other)
  5. Other taxes (sonstige Steuern) (included in Expense – Other)

United States   This item includes

  1. Amortization of deferred credit
  2. Discount of receivables sold (factoring)
  3. Discount on debt reacquired
  4. Dividend and other financial income
  5. Franchise income (when corresponding expenses are not reported on the Income Statement)
  6. Royalty income
  7. Sales of leased departments (when a breakout of corresponding expenses is available)

Nonoperating Income (Expense) – Total
This item represents any income (expense) resulting from secondary business–related activities excluding activities considered to be a normal part of operations.
This item is a component of Income (Loss) Before Income Taxes Pretax Income Appropriations.

This item is the sum of:

  1. Interest and Dividend Income – Total
  2. Interest Capitalized
  3. Nonoperating Income (Expense) – Other

Operating Expense
This item represents the sum of different components based on the format the company uses to report its income account. (Check the Income Statement Model Number to determine the format type.)
This item is a component of Operating Income.

When the Income Statement Model Number is 01 (Cost of Sales Format), this item is the sum of:

  1. Cost of Goods Sold
  2. Operating Expense – Other
  3. Selling, General, and Administrative Expense

When the Income Statement Model Number is 02 (Purchases Format), this item is the sum of:

  1. Operating Expense – Other
  2. Raw Materials, Supplies, and Merchandise
  3. Staff Expense – Total
    less:
  4. Capitalized Costs
  5. Change in Stocks

When the Income Statement Model Number is 03 or 04, this item is calculated from available information and components are not identified.

When the Income Statement Model Number is 05, all items in Income Statement Model Numbers 01 and 02 may be used.

Operating Expense – Other
This item represents operating expense not classified elsewhere.
This item is a component of Operating Expense on Income Statement Model Numbers 01, 02, and 05.

This item includes

  1. Government grants (when reported on the Income Statement as a straight transfer or deduction)
  2. Operating provisions provided and written back
  3. Other amounts (when reported as deductions from gross profit (loss) on sale of assets)
  4. Research and development expense

This item contains a Not Available data code (@NA) on Income Statement Model Numbers 03 and 04.

Canada   This item contains a Not Available data code (@NA).

Germany   This item includes

  1. Income from reversal of accrued liabilities or provisions (Erträge aus der Auflösung von Rückstellungen)
  2. Other expenses (sonstige Aufwendungen)
  3. Other taxes (sonstige Steuern)

United States   This item contains a Not Available data code (@NA).

Operating Income
This item represents the total income from normal business operations.
This item is a component of Income (Loss) Before Income Taxes Pretax Income Appropriations.

This item is the sum of:

  1. Operating Revenues – Other
  2. Net Sales – Total
    less:
  3. Depreciation and Amortization – Total
  4. Operating Expense

Operating Revenues – Other
This item represents operating revenues not classified as part of Net Sales – Total.
This item is a component of Operating Income.

When revenues are reported and no breakout of components is available, this item includes

  1. Capitalized costs
  2. Credit balances of change in inventories/stocks
  3. Government grants
  4. Operating costs not applicable to current year’s trading
  5. Release of amortization, depreciation, and other provisions
  6. Sundry operating revenues

Canada   This item contains a Combined Figure data code (@CF) (included in Net Sales – Total).

Germany   This item includes other income (sonstige Erträge).

South Africa   This item includes working income from uranium production.

United States   This item contains a Combined Figure data code (@CF) (included in Net Sales – Total).

Raw Materials, Supplies, and Merchandise
This item represents the costs associated with the purchase or depletion of inventories/stocks.
This item is a component of Operating Expense on Income Statement Model Numbers 02 and 05.
This item contains a Not Available data code (@NA) on Income Statement Model Numbers 01, 03, and 04.

France   This item excludes other purchases and external charges (autres achats et charge externes) (included in Operating Expense – Other).

Selling, General, and Administrative Expense
This item represents the aggregate amount of all indirect operating costs incurred to secure operating income.
This item is a component of Operating Expense on Income Statement Model Numbers 01 and 05.
This item excludes depreciation allocated to Selling, General, and Administrative Expense (included in Depreciation of Fixed Assets (Tangible)).
This item contains a Not Available data code (@NA) on Income Statement Model Numbers 02, 03, and 04.

Canada   When reported separately, this item includes

  1. Advertising expense
  2. Amortization of research and development costs (including software costs)
  3. Bad debt expense (provision for doubtful account)
  4. Commissions
  5. Directors’ fees and remuneration
  6. Distribution expense
  7. Engineering expense
  8. Extractive industries’ carrying charges on nonproducing properties, delay rentals, drilling program marketing expense, lease rentals or expense, exploration expense, research and development expense, and geological and geophysical expense
  9. Foreign currency adjustments
  10. Freight–out expense
  11. Indirect costs
  12. Lease expense
  13. Marketing expense
  14. Operating expense (when there is no selling, general, and administrative expense)
  15. Parent company charges for administrative services
  16. Pension, retirement, profit sharing, provision of bonus and stock options, employee insurance, and other employee benefit expenses (for nonmanufacturing companies)
  17. Research and development expense
  18. Software expense
  19. Strike expense

Japan   This item includes business enterprise tax (when a breakout from total income tax is available).

United Kingdom   This item includes finance lease charges (when a breakout from interest expense is available) on an Income Statement Model Number 01.

United States  When reported separately, this item includes

  1. Advertising expense
  2. Amortization of research and development costs (including software costs)
  3. Bad debt expense (provision for doubtful accounts)
  4. Commissions
  5. Directors’ fees and remuneration
  6. Distribution expense
  7. Engineering expense
  8. Extractive industries’ carrying charges on nonproducing properties, delay rentals, drilling program marketing expense, lease rentals or expense, exploration expense, research and development expense, and geological and geophysical expense
  9. Foreign currency adjustments
  10. Freight–out expense
  11. Indirect costs
  12. Lease expense
  13. Marketing expense
  14. Operating expense (when there is no selling, general, and administrative expense)
  15. Parent company charges for administrative services
  16. Pension, retirement, profit sharing, provision of bonus and stock options, employee insurance, and other employee benefit expenses (for nonmanufacturing companies)
  17. Research and development expense
  18. Software expense
  19. Strike expense

Staff Expense – Total
This item represents direct payments to, and indirect payments on behalf of all employees.
This item includes

  1. Employee benefit plans
  2. Other social expenditures
  3. Pension and retirement expense
  4. Social security contributions
  5. Staff expense not allocated to another operating expense component
  6. Wages and salaries

This item excludes

  1. Insurance agents commissions (included in Commissions Expense [Insurance])
  2. Staff expense allocated to another operating expense component
  3. Staff expense of employees devoted to property operations (included in Equipment and Occupancy Expense)

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