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Profit

Profit is income less expenses for a stated period under the relevant accounting basis. Calculate the specified subtotal by including the income and expenses relevant to that measure. Gross profit, operating profit and profit after tax are different figures. Accruals, depreciation and non-cash items explain why reported profit can differ from cash movement. A loss arises when the relevant expenses exceed income for the same period.

Worked example

Revenue and other income of 1,000 less expenses of 800 give profit 200.

Common mistake

Profit is not the same as cash received or a bank balance.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA F1 Direct July 2027–August 2028
ACCA F2 Direct July 2027–August 2028
ACCA F3 Direct July 2027–August 2028
ACCA FA Direct September 2026–June 2027
ACCA K1 Direct July 2027–August 2028
CIMA BA3 Direct Official assessment-window verification pending
FIA FFA Direct September 2026–June 2027

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