What is a profit and loss statement (P&L)? | Definition from TechTarget
Summary
Organizations often produce P&L statements to comply with U.S. Security Exchange Commission (SEC) rules -- such as the Sarbanes-Oxley Act of 2002 -- or to meet other standards or regulatory requirements. This includes any expenses not directly related to delivering the core products or services, such as rent, utilities, insurance or marketing costs. For example, many P&L statements contain an entry for operating income, which lists the organizations profits before taking into account expenses such as interest or taxes. Public companies tend to use the accrual method, which is also favored in the generally accepted accounting principles (GAAP) rules and standards. This can often be accomplished with the finance modules in enterprise resource planning (ERP) systems or by adopting specialized financial reporting software.