How to calculate income at the enterprise

According to PBU 9/99 “Income of an organization”, the income of an enterprise is recognized as an increase in economic benefits resulting from the receipt of assets (cash, other property) and (or) repayment of obligations, leading to an increase in the capital of this organization, with the exception of contributions from participants (owners of property).

You will need

• - accounting data on revenue for the period;

• - accounting data on other income for the period;

• - accounting program or calculator.

Instruction manual

1

The main item of the company's income, as a rule, is the income from its ordinary activities. It recognizes the proceeds from the sale of goods, work, services. Under the revenue means the amount in rubles for which the transaction was completed. This amount should be recorded in the contract and in documents proving the fulfillment of the contract. Moreover, the fact of payment does not matter. Therefore, to determine the main income you need to calculate the revenue of the organization.

2

To calculate other income, you need to add the following types of income: revenue from non-core activities, including the sale of fixed assets and materials; positive exchange rate differences; interest on loans issued; proceeds from the provision of the enterprise’s assets for temporary use and other income established by Section III of PBU 9/99 “Organization Income”.

3

To calculate the total income of the enterprise, it is necessary to add the income from ordinary activities and other income.

4

Sometimes, income means the profit of the organization. This is not true. To calculate the profit of the organization, you need to calculate all its expenses for the period aimed at obtaining economic benefits. You must deduct expenses from income. The resulting amount is the profit of the enterprise for the considered period of time.

note

Often, revenue and cash flow occur in different periods. Therefore, income should not be taken as the amount of money that the company currently has.

Useful advice

To make the right managerial decisions, the manager must distinguish between such concepts as income, profit, and the receipt of assets, be able to correctly calculate them, and compare between themselves and from period to period.