Income From Continuing Operations Comparative Income Statement

Partial Income Statement

A partial Income statement is generally prepared by the company when certain or uncertain changes affect the company's financial performance and is reported for only part of the accounting period. Normally, we prepare an income statement The income statement is one of the company's financial reports that summarizes all of the company's revenues and expenses over time in order to determine the company's profit or loss and measure its business activity over time based on user requirements. read more for a single month or a year. However, a partial income statement can be prepared for specific dates, from October 2, 2018, to October 29, 2018.

Table of contents

• Partial Income Statement
  • Partial Income Statement Example.
  • Single Step Partial Income Statement
  • Multi-Step Partial Income Statement
  • Conclusion
  • Recommended Articles

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Partial Income Statement Example.

Let's understand this concept with the help of an example-

Discontinued operations are the operations of that company segment that has been disposed of or sold. As per the accounting regulations, discontinued operations should report separately from continuing operations. Here, we prepare a Partial Income statement of a discontinued operation.

Suppose ABC Company had two segments. One segment manufactured cellular phone equipment and the other manufactured office car vehicle equipment. Under GAAP, each segment is considered a separate component. The cellular phone equipment segment has not been a profitable business segment for the company.

On May 1, 2012, the company planned to dispose of the segment cellular phone. The Company sold the segment on January 31, 2013, for $2,000,000.The book value of this segment was $200,000, and as of December 31, 2012, the fair value of this particular segment was $2,500,000. The segment incurred a before-tax operating loss of $200,000 during the full accounting year, i.e., January 1, 2012, to December 31, 2012. The income tax for the company is 35%. ABC's after-tax income After-Tax Income is the amount of income left after deducting all the direct taxes levied by the respective country's Government, i.e., the amount left for an individual or company's personal disposal. read more from continuing operations is $500,000.

Here, Partial Income Statement will be-

Particulars	Amount ($)	Amount ($)
Income from Continuing Operations		5,00,000.00
Discontinued Operation:
-Income (Loss) from operations	-2,00,000.00
-Income Tax Benefits (Expense)	70,000.00
Income (loss) from discontinued Operation		-1,30,000.00
Net Income		3,70,000.00

As we can see, this income statement is only reporting information related to discontinued operations. Similarly, we can prepare partial income for the cost of goods sold, gross profit Gross Profit shows the earnings of the business entity from its core business activity i.e. the profit of the company that is arrived after deducting all the direct expenses like raw material cost, labor cost, etc. from the direct income generated from the sale of its goods and services. read more , or other components of an income statement.

Single Step Partial Income Statement

Single step Partial Income statement prepares only for a particular component of Income statements like income statement for the cost of goods sold The Cost of Goods Sold (COGS) is the cumulative total of direct costs incurred for the goods or services sold, including direct expenses like raw material, direct labour cost and other direct costs. However, it excludes all the indirect expenses incurred by the company. read more , discontinued operation, or gross profit, etc.  One can prepare this income statement for different components of an Income statement.

Format – Partial Income Statement Discontinued Operations

Partial Income Statement Discontinued Operations
Particulars	Amount ($)	Amount ($)
Income from Continuing Operations		XXX
Discontinued Operation:
Income (Loss) from operations	(XXX)
Income Tax Benefits (Expense)	XXX
Income (Loss) from discontinued Operation		XXX
Net Income		XXX

Partial Income Statement Cost of Goods Sold
Particulars	Amount ($)	Amount ($)
Sales		XXX
Cost of Goods Sold
Beginning Inventory	(XXX)
Purchase Net	XXX
Ending Inventory	(XXX)
Cost of Goods Sold		XXX
Gross Profit		XXX

Multi-Step Partial Income Statement

A multi-step partial income statement prepares more than one income statement component. It includes two or more two steps of an income statement.

Multi Step Partial Income Statement
Particulars	Amount ($)	Amount ($)
Sales		XXX
Cost of Goods Sold
Beginning Inventory	(XXX)
Purchase Net	XXX
Ending Inventory	(XXX)
Cost of Goods Sold		XXX
Gross Profit (Step 1)		XXX
Less: Operating Expenses		XXX
Net Operating Income (Step 2)		XXX

Auditors An auditor is a professional appointed by an enterprise for an independent analysis of their accounting records and financial statements. An auditor issues a report about the accuracy and reliability of financial statements based on the country's local operating laws. read more do not certify a partial income statement because it does not include a complete one. It can only be used for a specific purpose. Management uses it when they want to analyze some information about a certain line item of an income statement. It only prepares for internal use; auditors do not prefer this when auditing of financial statements.

Conclusion

Here are some bullet points to understand the partial income statement-

• The partial Income statement reports only some portion of the income statement.
• It reports the information only for the part of the accounting period Accounting Period refers to the period in which all financial transactions are recorded and financial statements are prepared. This might be quarterly, semi-annually, or annually, depending on the period for which you want to create the financial statements to be presented to investors so that they can track and compare the company's overall performance. read more .
• Companies prepare it only in rare cases, like if one of the segments of the company is discontinued.
• It can be a single step or multi-step statement.
• It is not certified by auditors.

Recommended Articles

This article has been a guide to what is a Partial Income Statement. Here we discuss Partial Income Statement Examples, formats – single step and multi-step- along with their applications. You may learn more about accounting from the following articles –

• Example of Income Statement (IFRS Format)
• Multi-Step Income Statement Example
• Comparative Income Statement
• Profit vs. Income

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