Definition: Profit or loss for the year
Profit or loss for the year is the final accounting balance of ordinary and extra-ordinary activities of an enterprise. It is the sum of the surpluses of operating, financial and extra-ordinary activities calculated net of taxes and value adjustments.
In addition to gross ordinary surplus, other resources and other charges are also taken into account.
Other resources are defined as items accounted for as extraordinary income.
Other charges are defined as items accounted for as value adjustments, all direct taxes on the profit or loss and extraordinary charges. Value adjustments include those made in respect of formation expenses, tangible, intangible and financial fixed assets, as well as investments held as current assets and of other current assets to the extent that they exceed the amount of value adjustments which are normal in the unit. Taxes on the profit or loss includes tax on the profit or loss on ordinary activities, tax on the extra-ordinary profit or loss and other direct taxes not classified to these headings.
Profit or loss for the year may be calculated as follows:
Gross ordinary surplus (before taxes and value adjustments)
+ Other resources
- Other charges
= Profit or loss for the year