Schedule III Profit and Loss Format (Division I)

The Schedule III profit and loss format (Division I) is the presentation format prescribed for the Statement of Profit and Loss of a company under the Companies Act, 2013, where the company follows Accounting Standards (AS). It is a single vertical statement that runs from Revenue from operations and Other income, through a set of classified expenses, down to Profit before tax, tax expense, the profit for the period and Earnings per equity share — all with a comparative previous-year column and supporting notes.

The full Division I Statement of Profit and Loss structure

A Division I Statement of Profit and Loss presents the following lines, in this order. Each cross- refers to a note number, and each shows a current-year and a previous-year figure.

1. I. Revenue from operations — sale of products, sale of services and other operating revenues.
2. II. Other income — interest income, dividend income, net gain on sale of investments and other non-operating income.
3. III. Total Income (I + II).
4. IV. Expenses —
   • Cost of materials consumed;
   • Purchases of Stock-in-Trade;
   • Changes in inventories of finished goods, work-in-progress and Stock-in-Trade;
   • Employee benefits expense;
   • Finance costs;
   • Depreciation and amortisation expense;
   • Other expenses.
   Total expenses.
5. V. Profit before exceptional and extraordinary items and tax (III − IV).
6. VI. Exceptional items.
7. VII. Profit before extraordinary items and tax (V − VI).
8. VIII. Extraordinary items.
9. IX. Profit before tax (VII − VIII).
10. X. Tax expense — (1) Current tax; (2) Deferred tax.
11. XI. Profit (Loss) for the period from continuing operations (IX − X).
12. XII. Profit / (loss) from discontinuing operations.
13. XIII. Tax expense of discontinuing operations.
14. XIV. Profit / (loss) from discontinuing operations (after tax) (XII − XIII).
15. XV. Profit (Loss) for the period (XI + XIV).
16. XVI. Earnings per equity share — (1) Basic; (2) Diluted — shown for continuing operations and for total operations.

How to prepare a Schedule III profit and loss, step by step

1. Start from a finalised, tallied Trial Balance for the financial year.
2. Separate operating income (Revenue from operations) from incidental income (Other income).
3. Classify every expense ledger into the seven prescribed expense heads — build the cost of goods sold from materials consumed, purchases of stock-in-trade and the inventory change.
4. Compute profit before exceptional and extraordinary items and tax, then apply exceptional items, extraordinary items and tax.
5. Split tax expense into current tax and deferred tax, and present the profit for the period.
6. Compute basic and diluted EPS and present them on the face; prepare the supporting notes and the comparative previous-year column.
7. Round off the figures per the turnover-based rounding rules and present them consistently.

Quick reference: where common items go

Related formats and guides

The Statement of Profit and Loss is one half of the statutory set — see the Schedule III balance sheet format for the other. For the end-to-end workflow, read turning a Trial Balance into financial statements; for what goes into the notes, see notes to financial statements; and for the eleven ratios you must disclose, see the Schedule III financial ratios guide. LLPs use the ICAI LLP format and proprietorships, firms and trusts use the ICAI Non-Corporate Entity format.