What does yield mean?

Proceeds is the collection of natural or legal fruits on the property. The right to income may also accrue to a non-owner by law or with the consent of the owner. Income from production or business, business income, getting benefit. The accounting concept of gain is known as accounting gain. According to the traditional view, accounting gain is the difference between the realized income and the corresponding expenses derived from transactions during the period of the enterprise.

1. Difference between Realized Gain and Full Gain

Accounting gain includes only realized gain and excludes unrealized gain or loss, while economic gain treats the operating income of a business the same as the profit from holding, without consideration of whether the gain has been realized or not. Thus, in general, accounting earnings are less than economic earnings, and the difference is primarily attributable to retained earnings.

2. Difference between historical cost and current value

Accounting income follows the historical cost principle and the matching principle, which is conducive to objectively reflecting the management responsibility of the enterprise management. However, due to the inherent defects of the historical cost principle, especially the income measured at current value and expenses charged at historical cost, the calculation of accounting income lacks the inherent logical unity, and makes it difficult to implement the matching principle, so that the book value of assets does not reflect their actual value, and the cost can not be compensated in full. The economic gain is measured by the current value, which reflects the actual value of the asset and is conducive to the full compensation of the cost.

3. The difference between financial capital preservation and physical capital preservation

Accounting income maintains the financial capital preservation, that is, only the monetary value of the owner's inputs will not be eroded, and the part of the enterprise's income exceeding the value of the inputs will be treated as accounting income. Accounting focuses on reporting the financial results of operations. The economic return insists on the preservation of physical capital, only when the actual production capacity of the resources invested by the owner is preserved, can the revenue be recognized. It is believed that the reproduction of the enterprise can only proceed smoothly if the actual production capacity of the enterprise is maintained. Physical capital preservation is more meaningful than the return determined by financial capital preservation, but it is difficult to measure.

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