Other Income Definition Economics

Other income includes items such as interest from the company s bank accounts profit from the sale of a fixed asset and so forth.

Other income definition economics. Loaning money to a government bank business or other entity in return for interest payments. Gains represent increases in economic benefits and as such are no different in nature from revenue. The definition of income encompasses both revenue and gains. Other taxable income includes annuity payments rental income farming and fishing income unemployment compensation retirement plan distributions and stock options.

Economic income is the way for companies to account for changes in the value of a given asset in the market. Income over and above what covers a person s or company s bare essentials. A change in market value rather than cash received is the perfect example of an economic income. Revenue arises in the course of the ordinary activities of an entity and is referred to by a variety of different names including sales fees interest dividends royalties and rent.

Investors should review the numbers used to calculate ni because expenses. 1 wages and salaries paid to people from their jobs. Earnings per share are calculated using ni. Other income is not recurring and as a result is not included in some calculations of profit or loss.

For example if after covering one s rent food and other basic expenses one has a certain amount of money left over this is one s economic income. Income for a company that comes from anything other than its ordinary operations. In consumer theory income is another name for the budget constraint an amount to be spent on different goods x and y in. In economics factor income is the return accruing for a person or a nation derived from the factors of production.

Income as it is generally understood in economics is theoretically defined as the maximum amount that a household or other unit can consume without reducing its real net worth. Rental income wages generated by labor the interest created by capital and profits from entrepreneurial ventures. Net income ni is calculated as revenues minus expenses interest and taxes. Income is not the same as wealth.

Income is a flow of money going to factors of production. It generally recognizes unrealized gains in addition to recognizing realized gains.