Financial Education - Revenue Accounting and Gross Economic Profit Accounting

Sales has multiple definitions, being considered as an art, process and science that constitutes the income collected for products or services rendered in organizations, involving scientific processes and a series of organized steps for its effective execution.

The word diversity of sales revenue refers to the amount of monetary income in various currencies obtained from sales. However, when addressing the diversity of such revenues, it is essential to define what revenues are.

In accounting, revenues are considered to be the increase in a company's net worth due to an increase in its assets (sales-profit) or a decrease in its liabilities.

In other words, revenues are the monetary elements that arise under the consumption and profit effect. In view of this, it is significant to mention that income from sales is considered ordinary income.

According to the International Accounting Standard IAS 18, revenue is the gross inflow of economic benefits during the period arising in the course of an entity's ordinary activities, provided that such inflow results in an increase in equity that is not related to contributions from the owners of that equity.