profit and loss account

Statement of the profit or loss of a business organization taken from its accounts. Profit and loss accounts comprise three main elements: the trading accounts detailing sales revenues less production expenses to give a gross profit or loss; an account of any income from other sources (for example, rent from let properties) as well as administrative and other expenses or costs (overheads) to give a net profit or loss figure before the deduction of corporation tax; and the appropriation of profits for the payment of dividends and retention of profits in the company after the deduction of corporation tax. In the UK companies are required by company law to file profit and loss accounts with the UK Registrar of Companies.