Income Statement Modification

Accounting 🡪 Settings → Income Statement Modification

The accounting module system allows users to define and configure account details for accurate financial management. This includes setting the accounting type, naming the account, linking it to the statement of cash flows, and providing a description. Proper configuration ensures that accounts are categorised correctly and financial reports are accurate.

Accessing the Income statement modification

• Navigate to the Accounting → Settings → Configuration → Income statement modifications

Configuring Account Detail Types

• Apply income tax modification 

  • Using this option, users can apply the changes done in this module.

• Name

  • Description: 

    • This field is used to assign a unique and descriptive name to each line item on the income statement.

  • Guidelines: 

    • Use a clear and concise name that accurately describes the line item.

  • Example: 

    • "Sales Revenue" for the line item that records income from sales.

• Type

  • Description: 

    • This field specifies the type of income or expense for each line item. The type determines how the item is categorised in the income statement.

  • Options: 

    • Common types include Revenue, Cost of Goods Sold (COGS), Operating Expense, Other Income, Other Expense.

  • Example: 

    • Select "Revenue" for line items that represent income.

• Account

  • Description: 

    • This field links the line item to a specific account in the chart of accounts. The account determines where the financial data is sourced from.

  • Guidelines: 

    • Choose the appropriate account that corresponds to the line item's financial data.

  • Example: 

    • Select "Sales Account" for the Sales Revenue line item.

• Formula

  • Description: 

    • This field allows users to define a formula for calculating the value of a line item using other accounts and operators.

  • Setup:

    • Operator Dropdown: 

      • Select an operator (e.g., +, -, *, /) to define the calculation.

  • Account Dropdown:

    •  Select another account to include in the formula.

  • Example: 

    • To calculate "Net Sales," you might select "Sales Revenue" as the primary account, choose the "-" operator, and then select "Sales Returns" from the dropdown.

Figure 1 Income Statement Modification Definition

Figure 2 Income Statement Modification List

Note: Resetting the income statement modification will revert all changes and restore the default settings.