The Profit And Loss Account In Different Approaches. Advantages And Disadvantages

Abstract

The evolution, the development of increasingly complex activities emphasizes the utility, the necessity of the profit and loss account in the financial reporting by increasing the interest in the enterprise performance, especially for the dynamic information that this situation can provide In this paper we propose to approach the profit and loss account in view of two representative referential, namely in terms of IAS 1 standard " The preparation and presentation of the financial statements" and the European Accounting Directives, aiming to emphasize the advantages, but also the limits provided by this models. This way, will see which of these models of profit and loss account respond best to users' needs. In the second part of the paper, we present the model for the profit and loss account proposed by the economist RJ Thacker. This model shows interest in terms of efficiency of enterprise management. Even if this model has its limits, it deserves to be analysis thorough an elaborate study. Introduction The evolution, the development of increasingly complex activities emphasizes the utility, the necessity of the profit and loss account in the financial reporting by increasing the interest in the enterprise performance, especially for the dynamic information that this situation can provide. Meanwhile, there is a declining interest in the historical costs and static information. Although the balance sheet contains information on performance, it does not prevent the achievement of its forecasts. In this paper we propose to approach the profit and loss account in view of two representative referential, namely in terms of IAS 1 standard " The preparation and presentation of the financial statements" and the European Accounting Directives, aiming to emphasize the advantages, but also the limits provided by this models. This way, will see which of these models of profit and loss account respond best to users' needs. In the second part of the paper, we present the model for the profit and loss account proposed by the economist RJ Thacker. This model shows interest in terms of efficiency of enterprise management. Even if this model has its limits, it deserves to be analysis thorough an elaborate study. The financial performance-a very complex notion and high informational load for users of accounting information is reflected best by the financial statements, the profit and loss account and the situation of equity variations. The last situation can be presented as a statement of