Income Statement. An income statement, sometimes referred to as the statement of profits and losses, reports a business entity’s various revenues, costs and expenses, as well as net income -- the principle element of an income statement. Thus, an income statement is a summary of a business entity’s financial performance during a given accounting period. An income statement normally is organized to cover operating activities, nonoperating activities such as investments, any discontinued operations, and any unusual and infrequent extraordinary events.