In general, the profit and loss report is split into 2 sections; the inflows represented by the revenues and the outflows represented by the expenses. Revenues include the inflows from the primary business activities (i.e. sale of products and services), any revenue from secondary activities (e.g. bank interest) and any other financial gains. Revenues can also be extraordinary like a recovery of a loan or a one-time gain from the sale of a business division.

One the other hand, expenses include all outflows on account of the primary activities of the company (e.g. material and labour costs), any administrative costs like salaries, wages, rent etc and the interest cost on borrowings. Remember, that all these costs are accounted for in terms of accrual and not actually being incurred. The depreciation is not exactly a cash outflow but it is still shown as an expense in the P&L account so that the company can use the tax shields from such expenses to fund their future asset renewals.