When displaying crossings between two parental organisms, the resulting offspring are referred to as F1. If those offspring are crossed between themselves, the resulting generation is called F2. If two individuals of the F2 generation are crossed, they produce the F3 generation. The first crossing is always called P for “Parentes”. The F stands for “fili” meaning “sons” or “offspring”.
The way of showing these crossings is useful to show inbreeding or to show the generations since a special crossing, for example a crossing between two inbred lines.
In this system you can only cross within the same line. As soon as you introduce individuals that are not born from the P crossing, you will have to start over with the F-numbering.
What determines if it is the first crossing (P)?
That’s just what you decide. The first relevant crossing for your experiment is called P. Usually this means something significant, like the P generation has individuals from different breeding lines, geographical areas or have a certain inbred trait.
Example with pigeons
The following illustration shows the P, F1 and F2 generation. The P generation starts with two pigeons, a light colored male and a dark colored female. They are not related to each other. They will have two nests with each two young, resulting in four F1 offspring. A female F1 and a male F1 offspring produce one young, this is the F2 offspring. The F1 offspring is not inbred, the F2 offspring is.

The F1 generation can be extra special
The F1 generation is the first offspring of the P generation. If the P generation is chosen with good reason, the F1 generation could have special properties. For example heterosis, meaning this generation is stronger or more resilient than either of the P generation. This could occur for example when the P generation consists of two different species or two inbred lines.