Accounting for other income and expenses, essence and features

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. Receipt and expenditure of funds are those financial transactions that are reflected in accounting, legal and other documents.

To the category of "other income and expenses" include the arrival or disposal of funds associated with the provision for a fee for temporary use of property owned by the enterprise. This component is taken into account in the case of its absence in the accounting of incomes 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 the property of the enterprise, respectively, classified as "other", as well as various penalties and fines for failure to fulfill contractual obligations.

The expenditure of funds, on the legal side, this is their disposal, which is due to the existence of obligations to the enterprise from the debtors. Accounting for other income and expenses is reflected in the balance sheet of the organization. At each enterprise different accounting methods adapted for specific economic activities can be used. The accounting approach to determining the revenue and expenditure components of the balance has the main goal - to disclose the ways to reflect them in the accounting itself and to show statistical information about them in the accounting of the enterprise.

Other receipts and expenditures in its accounting accounting accounts with the account 91 (other income and expenses), which are usually opened such sub-accounts as:

• 1 - other income,
• 2 - other expenses,
• 9 - balance with respect to movement for other receipts and disposals.

The first sub-account is intended for the bookkeeping of the received assets, which are recognized as "other". Accordingly, the second sub-account is associated with expenses from the category of "other". Sub-account 91-9 is designed to reflect transactions in terms of other income and expenditure for the specified reporting period. Information on the first two sub-accounts is collected throughout the reporting period.

Accounting for other income and expenses is a synthesis of legal and economic nuances of this part of the balance sheet. The rules of their accounting policy in the modern economic environment of organizations are usually defined by two main normative documents:

• PBU9 / 99 - income of the enterprise,
• PBU10 / 99 - expenses of the enterprise.

Following point 2 of the first document, revenues should be considered an increase in economic benefits associated with the arrival of assets (monetary resources) and the liquidation of existing obligations. All this leads to an increase in the capital of the enterprise. The second document treats the consumption of the organization's resources as a reduction in the economic profit of the enterprise, which occurs due to the retirement of assets and the occurrence 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, the receipt of this or disposal, you should not take into account the contributions of property owners.

Other revenues with the end of the reporting period are closed by the organization's accounting department by internal records to the sub-account 91-9. Analytical accounting is applicable to account 91 for each type of miscellaneous income and expenditure. Generally, accounting for income implies an accounting estimate of financial transactions that lead to a change in the availability of assets with a plus sign. The accounting of expenses is a reflection of the operations characterizing the outflow of financial resources of the organization.