It can be tempting to think of a Profit & Loss statement and an Income Statement as two names for the same thing, but in fact they are two distinct reports. A Profit & Loss (P&L) statement is a financial statement that summarizes an organization’s income and expenses over a given period of time. It is important to note that a P&L statement does not include depreciation or amortization costs, which are one-time expenses that can’t be deducted in the current tax year. On the other hand, an Income Statement includes all operating income, expenses, and other gains or losses from both on and off balance sheet items. It shows revenues, cost of sales, operating expenses, and profits over a specific accounting period. The Income Statement is typically the first financial report used by a business to measure profitability and make decisions about cash flow.