Investment, Tax and Extraordinary Items

Investment Income
The various types of investment income can be broken down into three main headings:

  • Income from shares
  • Income from other fixed assets (for example, property)
  • Interest

If there are any losses or interest payable, these are then deducted (but they are shown separately on the face of the Profit and Loss Account as opposed to being hidden away in a note to the accounts)

The amount of tax due on ordinary activities (which are all the items so far listed in the Profit and Loss account but excluding extraordinary items).

Extraordinary Income and Charges
Extraordinary items in the accounts are quite rare.  The definition of an extraordinary item is that it is “…outside the ordinary activities of the company…”  But most things a company does, is related to it’s ordinary activities.  Even if you sell off a division of your company, this is not classed as an extraordinary item.

Exceptional Items
Exception income and expenditure relate to the ordinary activities of a company, but they are exceptional because the amounts of money involved are very large.


Comments are closed.