Other revenue is a classification for revenue produced from sources outside of the company’s normal operations.
Other revenue is disclosed as a separate line item on a company’s profit and loss statement.
The items which constitute other revenue depend on the nature of the business. For example, a retailer will likely not consider interest income or gains on sale of assets as part of normal operations. However, a financial or investment-related firm will likely recognize these items as part of normal operations.
Since other revenue is derived from sources other than normal operations, it is excluded from operating income.
For example, suppose in the month of June, a construction supply business does $3 million in ordinary revenue. The company’s cost of goods sold were $2 million and its operating expenses were $500,000. The company received $10,000 in interest from cash held in a money market account. The company also sold a forklift for $7,000. The forklift was carried on the books net of depreciation for $3,000. Determine the company’s total revenue and operating profit for the month of June.
The company’s total revenue is the sum of ordinary revenue and other revenue. Other revenue constitutes the $10,000 in interest and the $4,000 gain on the sale of the forklift. Thus, total revenue is $3 million plus $14,000, or $3.014 million. Operating profit excludes the $14,000 in other revenue. Thus, operating profit is ordinary revenue minus cost of goods sold minus operating expense, or $500,000.
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