The glossary to understand and take action

Income statement

The income statement, also called the profit and loss account in Luxembourg accounts, matches income and expenses for a period.

Notion comptable, fiscale ou juridique · Luxembourg Fiduciaries Editorial Team · Reviewed on

Understand the scope

Definition and points to distinguish

Profit or loss is not the bank balance. Payment terms, investments and repayments explain part of the differences between profit and cash flow.

In your file

What this changes in practice

The income statement brings together income and expenses attributable to a period. It helps distinguish the components of performance and explain changes in profit or loss. The result differs from bank transactions: an uncollected sale, an expense payable or depreciation may be recognised without simultaneous payment. To manage the business, reconcile results, margins and cash flow rather than relying on a single indicator.

A scenario to help you understand

Educational example

A company invoices an assignment at year-end, with payment at a later date. The income may relate to the completed financial year while the money is not yet available in the bank account.

Fictitious situation, presented to illustrate the concept.

Prepare for what comes next

Points to check

  • Vérifier le rattachement des produits et charges
  • Distinguer récurrent et exceptionnel selon le cadre applicable
  • Expliquer les écarts avec la trésorerie

The practical question

Find out more

Un bénéfice signifie-t-il que le compte bancaire augmente ?

Pas nécessairement. Des ventes peuvent être comptabilisées avant leur encaissement, et certaines dépenses ne touchent pas le résultat au même moment que la banque. Les investissements et remboursements d’emprunts jouent aussi sur la trésorerie. Pour comprendre la situation, rapprochez le résultat, l’évolution des créances et dettes, et les mouvements de financement.

Connecting concepts

Terms to know as well

Continue with the concepts, contacts and procedures related to this topic.

Balance sheetThe balance sheet presents, at a given date, the company's assets and the resources or obligations financing them.Cut-offPrinciple requiring expenses and income to be allocated to the financial year to which they relate, independently of payment alone.Contribution marginDifference between sales and costs that vary with the level of activity, under the management model used.DepreciationDepreciation allocates the depreciable amount of an asset over its estimated useful life, in accordance with the applicable rules.AccountingAccounting organises the recording of transactions and the production of information on the company’s financial position and results.Annual accountsAnnual accounts present the entity’s financial position and result at the end of a financial year, together with the documents required under its regime.

Put it into practice

Explore further with our guides

Practical guideBusiness cash flow: anticipating pressures and deciding in timePractical guideReading a balance sheet: useful questions for a business ownerPractical guideReading the profit and loss account: explaining business performancePractical guideSelf-employed: monitoring CCSS contributions and income changes

Sources and verification

References consulted on 20 September 2026. Official procedures specify the applicable conditions and exceptions.

This guide explains a general process. The applicable rules depend on your situation; it does not constitute personalised advice. Report a correction.

A definition gives you a reference point. To examine your situation, clarify your question with a professional.