Other income definition

What is Other Income?

Other income is income derived from activities unrelated to the main focus of a business. The exact type of transaction characterized as other income will vary by business. It is important to classify these types of income separately on a reporting entity’s income statement, to prevent readers from thinking that this income is part of its core earnings. By stating it separately, you can more easily discern how well the core operations of a business are functioning.

Examples of Other Income

As an example of other income, a manufacturer of washing machines earns rental income from sub-leasing unused office space to a third party; this rental income would be classified as other income on the company’s income statement. Other types of income that are commonly classified as other income are interest income, gains on the sale of assets, and gains from foreign exchange transactions.

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