The Income Statement

The income statement, or profit and loss statement (P&L), reports a company's revenue, expenses, and net income over a period of time.

Income statements have several limitations stemming from estimation difficulties, reporting error, and fraud.

GAAP's assumptions, principles, and constraints can affect income statements through temporary (timing) and permanent differences.

Noncash items, such as depreciation and amortization, will affect differences between the income statement and cash flow statement.