The economic activity of each normally functioning enterprise consists of the revenue and expenditure components of the budget. Accounting for other income and expenses is one of the most relevant aspects of the business structure. The receipt and expenditure of funds - these are financial transactions that are reflected in accounting, legal and other documents.
The category “other income and expenses” includes the receipt or disposal of funds related to the provision for a fee for temporary use of property owned by the enterprise. This component is taken into account in case of its absence in accounting for income and expenses that are associated with ordinary activities. The category of “accounting for other income and expenses” includes the movement of funds associated with the paid assignment of rights to patents, with the sale of property of the enterprise, respectively, referred to in the “other” section, as well as various penalties and penalties for failure to fulfill contractual obligations.
The expenditure of funds, from the legal side, is their disposal, which is associated with the presence of obligations to the company from debtors. Accounting for other income and expenses is reflected in the balance sheet of the organization. At each enterprise, various accounting methods that are adapted to a specific economic activity can be used. The accounting approach to determining the income and expenditure components of the balance sheet has the main goal - to disclose ways to reflect them in the accounting itself and to demonstrate statistical information about them in the accounting reports of the enterprise.
Other incomes and expenses in its accounting, the accounting department associates with account 91 (other income and expenses), to which such sub-accounts are usually opened as:
- 1 - other income
- 2 - other expenses
- 9 - balance regarding the movement on other income and disposals.
The first sub-account is designed to account for assets received that are recognized as “other”. Accordingly, the second subaccount is associated with expenses from the category of "other". Subaccount 91-9 is intended to reflect operations in terms of other income and expenses for the established reporting period. Information on the first two sub-accounts is collected throughout the reporting time.
Accounting for other income and expenses is a synthesis of the legal and economic nuances of this part of the balance sheet. The rules of their accounting policies in the modern economic environment of organizations are usually determined by two main documents of a normative nature:
- PBU9 / 99 - income of the enterprise,
- PBU10 / 99 - expenses of the enterprise.
Following paragraph 2 of the first document, the gain should be considered the increase in economic benefits associated with the arrival of assets (monetary resources) and the liquidation of existing liabilities. All this leads to an increase in the capital of the enterprise. The second document interprets the organization’s resource consumption as a decrease in the economic benefit of the enterprise, which occurs due to the disposal of assets and the emergence of obligations in connection with this, which entails a reduction in the capital of the enterprise. In both cases, regardless of the nature of the movement of tangible assets, whether it is received or disposed, contributions from property owners should not be taken into account.
Other income with the end of the reporting period are closed by the accounting department of the organization through internal records on subaccount 91-9. Accounting of analytical orientation applicable to account 91 is made for each variety of other income and expenses. As a rule, taking into account income means an accounting estimate of financial transactions that lead to a change in indicators of the presence of assets with a plus sign. Cost accounting is a reflection of operations characterizing the outflow of financial resources of the organization.