Single-Step Income Statement: Definition & Example

This accounting training tutorial on Single Step Income Statement will help you to understand:

  • What is Single Step Income Statement
  • Advantage of Single Step Income Statement
  • Template of Format of Single Step Income Statement

Income Statement can be in two format. One is Multiple Step Income Statement and another form of income statement is the single-step income statement. The single-step income statement is commonly known as income statement in the service companies. This format match with service industry because they don’t need to report gross profit. Advantage of using single step income statement format is that it groups all revenues and expenses together. Companies like IBMWalmart use this single step income statement format for their reporting.

Single-step income statement consist only one step—subtracting total expenses from total revenues for measuring the net income of any company.


Fig: Template of Single Step Income Statement

In a single-step statement, all data are recorded into two categories:

  • Revenues consist of operating revenues and other revenues and gains
  • Expenses consist of cost of goods sold, operating expenses, and other expenses and losses

Company use single-step income statement basically for gaining two benefits in the measuring of net income such as this format of single-step income statement is very simple to record data and to read and the second one is that a company does not recognize any type of profit or income until total revenues exceed total expenses, so the division of the income statement into these two categories are helpful for better understanding.