Specific information for the income statement
is in ASC Paragraph 830-10-55-11 and ASC Paragraph 830-30-45-3.
The next step in creating a Contribution Margin Income Statement
is subtracting the variable costs.
Embrace the concept that there needs to be an understanding of the composition of the income statement
in a detailed way, creating highly analytic assessments of the unique contribution (or lack thereof) for each account within each product.
The lack of rate regulation and its influence on disclosures for industrial companies would result in industrial companies reporting income statements
less frequently than railroads and utilities since railroads and utilities faced the rate regulation pressures to prepare and disclose income statements
Because of these differences, some companies currently perform a "bottom line" consolidation of taxable income because the income statement
lines are not consistent between forms.
When a change in principle is made, the cumulative effect is disclosed on the income statement
for most changes, although it is a paper entry with no impact on cash flows or current operating activities.
Copies of an available monthly and annual income statements
issued during the look-back period should be retained, as well as any other evidence to document when and to whom statements were issued, etc.
Subtracting them gives you the by-product of the income statement
, net income/profit.
In order to examine the income statement
for accuracy, you should start with a general review of the statement using the following analytical tools:
Describe how the proposed changes would affect the manner in which reporting entities present their income statements
TEI recommends that, at the taxpayer's option, the request for an income statement
(on Schedule C), balance sheet (on Schedule F), and Current Earnings & Profits reconciliation (on Schedule H) may be satisfied by providing tabular schedules that set forth the required line items for all disregarded entity members of a CFC or CFP.