An income statement is another name for the profit and loss (P&L) statement. It reports income, costs and profit over a period.
Published July 2026 · Updated July 2026
An income statement is a financial statement that reports a business's income, costs and profit over a period such as a month, quarter or year. It is exactly the same report as the profit and loss statement, just a different name, more common under IFRS and in the US, while UK businesses often say "P&L".
It starts with revenue (turnover), subtracts the cost of sales to give gross profit, then subtracts overheads to reach net profit. It sits alongside the balance sheet and cash flow statement as one of the three core statements.
No, they are two names for the same report. You may see either term depending on the accounting framework and country.
The income statement covers a period and feeds profit into the balance sheet, which is a snapshot at a point in time.
Source: Investopedia ↗. This glossary is written for small business owners, so definitions are simplified. Tax rates and thresholds reflect 2026/27 UK rules and change over time. Berified does not provide accounting, tax or legal advice; always check the source or a qualified adviser.