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Net Income and Residual Income

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA APM Exams › Net Income and Residual Income

  • This topic has 1 reply, 2 voices, and was last updated 11 years ago by Ken Garrett.
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  • May 7, 2014 at 7:30 am #167723
    deepmaharaj
    Member
    • Topics: 58
    • Replies: 32
    • ☆☆

    Dear Sir / Madam

    What is the difference between Net Income and Residual Income ! Or both are one and same !

    Deepak

    May 7, 2014 at 10:13 am #167741
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10637
    • ☆☆☆☆☆

    Net income = income after all expenses. It would depend on the context/definition whether that was after or before interest. Eg net operating income is before interest.

    Residual income = divisional net operating income less a notional interest charge for the division’s use of group capital.

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