Operating profit or loss

Updated: Aug 20, 2021

An accounting term that has been given more significance by the terminology adopted in the formats for the profit and loss accounts of limited companies first provided in Schedule I of the 1981 Companies Act and now contained in Part I of Schedule 4 of the Companies Act Part 1985. These suggested formats refer to ‘operating income’ and ‘operating charges’, being the items of income and expenditure appropriate to the principal activity of the company, i.e. before items of an extraordinary nature are dealt with. The difference between operating income and charges would be the operating profit, or loss, for the period.

Reference: The Penguin Business Dictionary , 3rd edt.

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James Knight
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