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Encyclopedia > Revenue

In business, revenue or revenues is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. Some companies also receive revenue from interest, dividends or royalties paid to them by other companies.[1] Revenue may refer to business income in general, or it may refer to the amount, in a monetary unit, received during a period of time, as in "Last year, Company X had revenue of $32 million." Profits or net income generally mean total revenue minus total expenses in a given period. The Office of the Revenue Commissioners (RC) - now called simply Revenue - is the Irish Government agency responsible for customs, excise, taxation and related matters. ... Her Majestys Revenue and Customs (HMRC) is a new department of the British Government created by the merger of the Inland Revenue and Her Majestys Customs and Excise which came into formal effect on 18 April 2005. ... Income, generally defined, is the money that is received as a result of the normal business activities of an individual or a business. ... For other uses, see Corporation (disambiguation). ... In commerce, a product is a good economics and accounting good or service which can be bought and sold. ... For other senses of this word, see interest (disambiguation). ... It has been suggested that ex-dividend date be merged into this article or section. ... This article or section does not adequately cite its references or sources. ... For exchange rates, see here. ... This article or section does not cite any references or sources. ... Net income is equal to the income that a firm has after subtracting costs and expenses from the total revenue. ... In accounting, an expense represents an event in which an asset is used up or a liability is incurred. ...

For non-profit organizations, annual revenue may be referred to as gross receipts.[2] This revenue includes donations from individuals and corporations, support from government agencies, income from activities related to the organization's mission, and income from fundraising activities, membership dues, and financial investments such as stock shares in companies.[3] For government, revenue includes gross proceeds from income taxes on companies and individuals, excise duties, customs duties, other taxes, sales of goods and services, dividends and interest.[4] A non-profit organization (abbreviated NPO, or non-profit or not-for-profit) is an organization whose primary objective is to support an issue or matter of private interest or public concern for non-commercial purposes, without concern for monetary profit. ... Look up mission statement in Wiktionary, the free dictionary. ... For other uses, see Stock (disambiguation). ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Excise tax, sometimes called an excise duty, is a type of... Customs is the plural of custom, a common practice among a group of people. ...

In Europe the term is turnover. For individuals, the equivalent term is "income". For other uses, see Europe (disambiguation). ... Look up Turnover in Wiktionary, the free dictionary. ...

In accounting and financial analysis, revenue is often referred to as the "top line" due to its position on the income statement at the very top. This is to be contrasted with the "bottom line" which denotes net income, which is revenues minus expenses.[5] It has been suggested that Accounting scholarship be merged into this article or section. ... Financial analysis refers to an assessment of the viability, stability and profitability of a business, sub-business or project. ... An Income Statement, also called a Profit and Loss Statement (P&L), is a financial statement for companies that indicates how Revenue (money received from the sale of products and services before expenses are taken out, also known as the top line) is transformed into net income (the result after... Net income is equal to the income that a firm has after subtracting costs and expenses from the total revenue. ...



In general usage, revenue is income received by an organization in the form of cash or cash equivalents. Sales revenue or revenues is income received from selling goods or services over a period of time. Tax revenue is income that a government receives from taxpayers. For other uses, see Cash (disambiguation). ... In bookkeeping, accounting, and finance, sales are operating revenues earned by a company when it sells its products. ... Tax revenue is the income that is gained by governments because of taxation of the people. ...

In more formal usage, revenue is a calculation or estimation of periodic income based on a particular standard accounting practice or the rules established by a government or government agency. Two common accounting methods, cash basis accounting and accrual basis accounting, do not use the same process for measuring revenue. Corporations that offer shares for sale to the public are usually required by law to report revenue based on generally accepted accounting principles or International Financial Reporting Standards. Publicly-traded companies are required to follow certain accounting rules to prepare financial statements so that the readers of the statements can easily compare different companies. ... This article does not cite any references or sources. ... Generally Accepted Accounting Principles (GAAP) is the standard framework of guidelines for financial accounting, mainly used in the U.S.A.. It includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements. ... International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB). ...

In a double-entry bookkeeping system, revenue accounts are general ledger accounts that are summararized periodically under the heading Revenue or Revenues on an income statement. Revenue account names describe the type of revenue, such as "Repair service revenue", "Rent revenue earned" or "Sales".[6] In accountancy, the double-entry bookkeeping (or double-entry accounting) system is the basis of the standard system used by businesses and other organizations to record financial transactions. ... The general ledger, sometimes known as the nominal ledger, is the main accounting record of a business which uses double-entry bookkeeping. ...

Business revenue

Business revenue is income from activities that are ordinary for a particular corporation, company, partnership, or sole-proprietorship. For some business such as manufacturing businesses and grocery stores, most revenue is from the sale of goods. Service businesses such as law firms and barber shops receive most of their revenue from rendering services. Lending businesses such as car rentals and banks receive most of their revenue from fees and interest generated by lending assets to other organizations or individuals. Manufacturing (from Latin manu factura, making by hand) is the use of tools and labor to make things for use or sale. ... For a large scale grocery store, see supermarket. ... A law firm is a business entity formed by one or more lawyers to engage in the practice of law. ... For other uses of the word, see the Barber disambiguation page. ... Europcar Sixt A car rental, rent-a-car or car hire agency is a company that rents automobiles for short periods of time (ranging from a few hours to a few weeks) for a fee. ... For other uses, see Bank (disambiguation). ... This article is about the business definition. ...

Revenues from a business's primary activities are reported as Sales, Sales revenue or Net sales. This excludes product returns and discounts for early payment of invoices. Most businesses also have revenue that is incidental to the business's primary activities, such as interest earned on deposits in a demand account. This is included in revenue but not included in Net Sales.[7] Sales revenue does not include sales tax collected by the business. In bookkeeping, accounting, and finance, sales are operating revenues earned by a company when it sells its products. ... An invoice or bill is a commercial document issued by a seller to a buyer, indicating the products, quantities and agreed prices for products or services with which the seller has already provided the buyer. ... It has been suggested that this article or section be merged with Current account (banking). ... A sales tax is a consumption tax charged at the point of purchase for certain goods and services. ...

A public company reports its total annual revenues based on its fiscal year. Public companies also report quarterly revenues. This article does not cite any references or sources. ...

Internally, companies break revenue down by operating segment, geographic region, and product line. Product lining is the marketing strategy of offering for sale several related products. ...

Revenue recognition and unearned revenue

Main article: revenue recognition

Standards vary as to when revenue should be recognized. The Financial Accounting Standards Board’s (FASB) Statement of Financial Accounting Concept 5 states that revenues should be recognized when they are “realized or realizable” and “earned”. Revenues are “realized or realizable” when products are exchanged for assets (such as cash) or claims to assets (such as promises to pay). Revenues are “earned” when the entity has performed all duties necessary to the purchaser. Revenue recognition principle is one of the four main principles in the US generally accepted accounting principles. ... The Financial Accounting Standards Board (FASB) is a private, non-for-profit organization whose primary purpose is to develop Generally Accepted Accounting Principles in the United States (US GAAP). ... This article is about the business definition. ...

Often one of the two situations will arise but not both. If assets are received before revenue is earned, a liability account is created called Unearned revenue. An example of when this would happen is in the event of magazine subscriptions: suppose a company sold 12 month magazine subscriptions on July 1, 2005 for $10,000 cash. At the company’s year end, December 31, the company is still obligated to deliver 6 months, or $5,000, worth of magazines to subscribers. In this case, the company would recognize $5,000 as revenue for 2005, and $5,000 would be seen in the liability account Unearned revenue. A similar situation occurs when a property-casualty insurance enterprise receives premium at the start of the period insured. The insurer establishes an "unearned premium reserve" for the portion of the premium pro-rated for the unexpired portion of the policy period.[8] (See earned premium.) In the most general sense, a liability is anything that is a hindrance, or puts individuals at a disadvantage. ... is the 182nd day of the year (183rd in leap years) in the Gregorian calendar. ... Year 2005 (MMV) was a common year starting on Saturday (link displays full calendar) of the Gregorian calendar. ... is the 365th day of the year (366th in leap years) in the Gregorian calendar. ... Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. ... This article should belong in one or more categories. ...

In general, for US GAAP purposes, revenue should be recognized at time of delivery of the goods or performance of the service. If cash is received prior to this time, revenue is unearned. If cash has not yet been received at time of performance, the asset account Accounts receivable is used to record the revenue. This is in contrast to IRS revenue recognition policies, which call for revenues to be recognized on a cash received basis. In the above magazine example, the company would have to pay taxes on $10,000 of "revenue" for 2005. Generally accepted accounting principles (GAAP) are the accounting rules used to prepare financial statements for publicly traded companies and many private companies in the United States. ... Accounts receivable is one of a series of accounting transactions dealing with the billing of customers who owe money to a person, company or organization for goods and services that have been provided to the customer. ... Seal of the Internal Revenue Service Tax rates around the world Tax revenue as % of GDP Part of the Taxation series        IRS redirects here. ...

Financial analysis

Main article: financial analysis

Revenue is a crucial part of financial analysis. A company’s performance is measured to the extent to which its asset inflows (revenues) compare with its asset outflows (expenses). Net Income is the result of this equation, but revenue typically enjoys equal attention during a standard earnings call. If a company displays solid “top-line growth,” analysts could view the period’s performance as positive even if earnings growth, or “bottom-line growth” is stagnant. Conversely, high income growth would be tainted if a company failed to produce significant revenue growth. Consistent revenue growth, as well as income growth, is considered essential for a company's publicly traded stock to be attractive to investors. Financial analysis refers to an assessment of the viability, stability and profitability of a business, sub-business or project. ... Financial analysis refers to an assessment of the viability, stability and profitability of a business, sub-business or project. ... In accounting, an expense is a general term for an outgoing payment made by a business or individual. ... Net income is equal to the income that a firm has after subtracting costs and expenses from the total revenue. ... Earnings Calls are a teleconference in which a public company discusses the financial results of a reporting period. ... For other uses, see Stock (disambiguation). ...

Revenue is used as an indication of earnings quality. There are several financial ratios attached to it, the most important being gross margin and profit margin. Also, companies use revenue to determine bad debt expense using the income statement method. A financial ratio is a ratio of two numbers of reported levels or flows of a company. ... Gross margin can be defined as the amount of contribution to the business enterprise, after paying for direct variable unit costs, required to cover overheads (fixed commitments) and provide a buffer for unknown items. ... Profit margin is a measure of profitability. ...

Price / Sales is sometimes used as a substitute for a Price to earnings ratio when earnings are negative and the P/E is meaningless. Though a company may have negative earnings, it almost always has positive revenue. The P/E ratio (price-to-earnings ratio) of a stock (also called its earnings multiple, or simply multiple, P/E, or PE) is used to measure how cheap or expensive its share price is. ...

Gross Margin is a calculation of revenue less Cost of Goods Sold, and is used to determine how well sales cover direct variable costs relating to the production of goods. Gross margin can be defined as the amount of contribution to the business enterprise, after paying for direct variable unit costs, required to cover overheads (fixed commitments) and provide a buffer for unknown items. ... In accounting, the cost of goods sold (also, cost of sales or cost of revenue) describes the direct expenses incurred in producing a particular good for sale, including the actual cost of materials that comprise the good, and direct labor expense in putting the good in salable condition. ...

Net Income / Sales, or Profit margin, is calculated by investors to determine how efficiently a company turns revenues into profits. Profit margin is a measure of profitability. ...

Government revenue

Government revenue comes primarily from taxes but includes all amounts of money received from sources outside the government entity. Large governments usually have an agency or department responsible for collecting government revenue from companies and individuals[9] An agency is a department of a local or national government responsible for the oversight and administration of a specific function, such as a customs agency or a space agency. ... Departmentalization refers to the process of grouping activities into departments. ...

See also

Look up revenue in Wiktionary, the free dictionary.

Wikipedia does not have an article with this exact name. ... Wiktionary (a portmanteau of wiki and dictionary) is a multilingual, Web-based project to create a free content dictionary, available in over 150 languages. ...

Notes and references

  1. ^ Williams, Jan R.; Susan F. Haka, Mark S. Bettner, Joseph V. Carcello (2008). Financial & Managerial Accounting. McGraw-Hill Irwin, p 199. ISBN 9780072996500.  This definition is based on IAS 18.
  2. ^ 2006 Instructions for Form 990 and Form 990-EZ, US Department of the Treasury, p. 22
  3. ^ http://www.muridae.com/nporegulation/accounting.html#revenue
  4. ^ 2005-06 Australian Government Budget
  5. ^ Williams, p.51
  6. ^ Williams, p. 196
  7. ^ Williams, p. 647
  8. ^ Williams, p.151.
  9. ^ HM Revenue & Customs (United Kingdom) Office of the Revenue Commissioners (Ireland) Internal Revenue Service bureau, Department of the Treasury (United States) Missouri Department of Revenue Louisiana Department of Revenue

  Results from FactBites:
Revenue (374 words)
Revenue is calculated by multiplying the price at which goods or services are sold by the number of units or amount sold.
Revenue is the amount of money that is brought into a company by its business activities.
In the case of government, revenue is the money received from taxation, fees, fines, inter-governmental grants or transfers, securities sales, mineral rights and resource rights, as well as any sales that are made.
Classification Manual - Chapter 7: Revenue (2323 words)
Revenue includes all amounts of money received by a government from external sources during its fiscal year (i.e., those originating "outside the government"), net of refunds and other correcting transactions, other than issuance of debt, sale of investments, and agency or private trust transactions.
One important feature of tax revenue is the need to pass a "visibility test." That is, the tax levy must be visible to the taxpayer as being a tax and not buried under the guise of another revenue.
Also excluded from insurance trust revenue and classified as general revenue are tax receipts credited directly to insurance trust funds and intergovernmental aid, such as grants and shared taxes for support of insurance trust activities (see Note 3).
  More results at FactBites »



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