Question

How do income and expense statements prepared by accountants differ from operating statements used by real estate investment analysts?

Answer 1

Operating statement which are used by real estate investment analyst will be not including any kind of non operating expenses and they will be just concentrated with the operating expenses and operating income so these operating statements will be not including any kind of interest expense and depreciation expense and other non operating income in nature.

Income and expense statement which are prepared by accountants will be accounting in for all kinds of expenses like interest expense along with the depreciation and other expenses which are not differentiated on the basis of their operating and non operating in nature, so they will be preparing the income and expense statement which will be reflecting the profits of the company after consideration of all the expenditure.

operating statements which are used by real estate analyst are not complete statement because they can have a lot of risk as they does not account for interest and interest can be a major portion of their expenses whereas income and expense statement which are prepared by the accountant are reflecting the complete net income of an entity.