An Overview of Diversities in the Use of the Profit and Loss Statement

Abstract

The abolition of the economic boundaries of different countries also has implications for the monitoring of businesses through accounting. In this context, the profit and loss account is that component which reflects the performance of the enterprise, that is, the extent to which it has achieved its objectives in terms of profit. In the income statement, there are flows that determine the result, understood in principle as a variation in equity during a financial period. Defining the performance of an enterprise is different, depending on the interest of the users, on the principles, conventions and accounting rules used to determine the outcome. This is what specialists in the field call accounting policies. This chapter examines the Profit and Loss Statement in the context of scarce and expensive resources, which must be used efficiently. The results show that it is necessary for companies to determine efficiency indicators by comparing the effects obtained with the efforts and the resources consumed by the company and operated by the management.