Profit before income taxes
Profit before income taxes is the period’s profit after income and expenses other than the income tax expense have been included. Deducting the income tax expense gives profit for the period. An entity can have tax payable that differs from the tax expense because of timing and other tax-accounting adjustments.
Worked example
Profit before tax is 100 and income tax expense is 20, so profit for the period is 80.
Common mistake
Deducting tax twice or treating the subtotal as cash generated.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | FR | Direct | Official assessment-window verification pending |
| ACCA | K1 | Direct | July 2027–August 2028 |
| FIA | FFA | Direct | September 2026–June 2027 |
Related terms
Also called: profit before tax, PBT