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Basis of preparation Income statement is prepared on the accruals basis of accounting. This means that income (including revenue) is recognized when it is earned rather than when receipts are realized (although in many instances ms project server 2013 sdk may be earned and received in the same accounting period). Conversely, expenses are recognized in the income statement when they are incurred even if they are paid for in the projdct or subsequent accounting prject. Hence, dividends paid to ordinary shareholders are not presented as an expense in the income statement and proceeds from ms project server 2013 sdk issuance of shares is not recognized as an income.