Net income

In business and accounting, net income (also total comprehensive income, net earnings, net profit, bottom line, sales profit, or credit sales) is an entity's income minus cost of goods sold, expenses, depreciation and amortization, interest, and taxes for an accounting period.[1]

It is computed as the residual of all revenues and gains less all expenses and losses for the period,[2] and has also been defined as the net increase in shareholders' equity that results from a company's operations.[3] It is different from gross income, which only deducts the cost of goods sold from revenue.

For households and individuals, net income refers to the (gross) income minus taxes and other deductions (e.g. mandatory pension contributions).

  1. ^ "IAS 1 Presentation of Financial Statements" (PDF). IFRS Foundation. 2012. Retrieved April 14, 2012.
  2. ^ Stickney, et al. (2009) Financial Accounting: An Introduction to Concepts, Methods, and Uses. Cengage Learning
  3. ^ Needles, et al. (2010) Financial Accounting. Cengage Learning.

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