Income includes a number of components involving funds that flow into a charity. One main component of income is revenue. A charity's total annual revenue determines its size (small, medium or large) and its financial reporting and other obligations during a reporting period.
Other components of income include:
Other income - income from transactions that are not part of your charity’s ordinary activities but affect your charity’s profit and loss. For example:
- realised gain on sale of assets (for example, motor vehicles, equipment, real estate, investments, assets that are not part of your charity’s inventory)
- realised gains on foreign currency transactions
- forgiveness of a liability or debt.
Other Comprehensive Income (OCI) - the difference between ‘OCI’ and ‘other income’ is that OCI generally accounts for unrealised gains and losses.
Generally, small charities will not have any OCI. For medium and large charities, some examples of OCI include:
- revaluations on land and buildings (that the charity still holds)
fair value movements for an equity instrument that is not held for trading where an irrevocable election was made at initial acquisition to account for these fair value movements in OCI*
- foreign currency transaction gains and losses on foreign subsidiaries.
*Depending on your charity’s accounting policy and the election made when applying AASB 9, fair value movements may instead be reportable under Profit and Loss under ‘Other Income’.