Updated July 23, 2022 178 Author: Dmitry Petrov
Hello, dear readers of the KtoNaNovenkogo.ru blog. Probably, only experienced entrepreneurs will say without hesitation what revenue, income, profit are, and how these concepts differ from each other.
To the common man, these terms seem to mean the same thing.
Therefore, today our task is to determine what income is, to identify its difference from profit, and also to find out what types of income exist.
simplified tax system income
Income from the simplified tax system is taken into account in the simplified taxation system - a special procedure for paying taxes, aimed at representatives of small and medium-sized businesses. The object chosen is income or income reduced by the amount of expenses incurred (according to the “income minus expenses” scheme). Income accounting is determined by Art. 346.15, 346.17 of the Tax Code of the Russian Federation. Simplified taxation system income - proceeds from the sale of goods, works, services and rights to property. Receipts listed in Art. 251 of the Tax Code of the Russian Federation, are not included in income. Accounts payable written off after the expiration of the limitation period are recognized as income.
How are revenue, income and expenses determined?
There are two methods that help determine revenue, income and expenses:
- By shipment. All indicators are calculated at the time of provision of a specific service or several services at once, as well as when performing work or transferring inventory items (inventory).
- Upon payment. The most commonly used method. The indicator is determined after all calculations have been made. Most suitable for small and medium-sized businesses, such as retail stores. The only drawback of this method is the lack of ability to control accounts receivable and payable, and all because only received funds are taken into account, without data on goods sold, services provided and work performed.
Income tax
According to the legislation of the Russian Federation, income (profit) tax is levied on individuals and legal entities. Payers of income taxes are legal entities that have taxable income in a financial year. Single and fixed tax payers are exempt from paying it. Personal income tax (PIT) is defined as a percentage of total income minus documented expenses. The legislation provides for different tax rates for different categories of taxpayers and different types of income. The size of the payment is determined by multiplying the tax base by the rate.
Who uses the net income indicator and for what purposes?
Net income is the main parameter reflecting the success of an enterprise. The following categories of persons use this indicator in the course of their work:
- Owners and shareholders. For them, the parameter reflects the success of the organization. It assesses the relevance of the management system used, calculates dividends, determines the size of shareholders’ shares, etc.
- Members of the management team. The parameter allows them to calculate and evaluate the financial stability of the organization.
- Supplier companies. Based on the parameter, an assessment is made of the solvency of the organization purchasing raw materials.
- Investors. The indicator allows them to assess the profitability of investing savings in the organization. Companies with large net profits are extremely attractive for investment.
- Credit organizations. Similar to the situation with suppliers, net income allows lenders to assess the borrower's solvency.
Budget revenues
Budget revenues are funds received through the collection of taxes, duties, payments, foreign loans, foreign economic activity, from the sale of land, from the sale of state reserves, fixed capital and income from other sources. They are used to carry out government functions (legal, political, organizational, economic, social, environmental, cultural, educational). The material basis of budget revenues is national income. The structure of budget revenues is subject to change and is determined by current economic conditions.
