Net Sales (SF.IS.NetSales)
Net Sales (SF.IS.NetSales) refers to sales receipts for goods and services, net of cash discounts, trade discounts, excise tax, and sales and allowances. Revenues are recognized on the basis of the applicable accounting principles.
Net Sales (SF.IS.NetSales) or Gross Sales (SF.IS.GrossRevenue) are usually not used at the same time, unless the company reported two divisions in either one or the other.
For industrials, Net Sales (SF.IS.NetSales) includes revenue from the sale of goods, investment income and equity of earnings in subsidiaries.
For non-banking financials, (like., security brokerages, investment banks, commercial and personal lending firms) net sales (SF.IS.NetSales) includes income from interest, commissions, fees, investments, and trading profits,etc..
For investment and related firms, Net Sales (SF.IS.NetSales) includes realized and unrealized investment income/(loss) , including dividends.
Apart from these, Net Sales (SF.IS.NetSales) also includes:
- Licensing fees and royalty income
- Commissions and management fees
- Cargo and freight (for airline companies)
- Income from leasing equipment/licensing technology
- Grants/royalty for contracts with government
- Franchise fees
- Equity in the undistributed earnings of affiliates, associates, joint ventures and unconsolidated subsidiaries
- Rental revenue including Tenant recoveries for real estate companies
- Membership fees and other income for retailers, when reported as part of revenue
- Reimbursement of expenses in consulting services
- Sale of land and buildings developed/constructed by the company(For construction related companies)
- Revenue from contracted research and development for biotechnology companies
Net Sales (SF.IS.NetSales) does not include:
- Gross receipts from the sale of goods and services, before the deduction of sales returns and allowances, or VAT and other excise taxes (classified as Gross Revenue (SF.IS.GrossRevenue))
- Sales tax, GST, VAT or other excise tax
- collected from clients on behalf of the government (classified as Gross Revenue (SF.IS.GrossRevenue),
- reported as a contra account to gross revenues (classified as Excise Taxes Payments (SF.IS.ExciseTaxPayments) or
- reported within COGS (classified as Excise Taxes Payments (SF.IS.ExciseTaxesPayments), or
- reported within OpEx, outside of COGS (classified as Property & Other Taxes (SF.IS.PropertyAndOtherTaxes) for utilities, or SG&A Expense (SF.IS.SGAExp) for other companies.
- Pre-tax equity in affiliates/minority interests (gains or losses arising from minority stakes held by the company in other businesses) is classified depending on the section and format of the income statement
- As Investment Income – Operating (SF.IS.InvIncome_Operating), If reported in the operating section, in the functional or cost-by-nature IS format.
- As Investment Income – Non-Operating (SF.IS.InvInc_NonOperating), If reported in the non-operating section, or not forming part of a company’s core operations or investment activities.
- Revenue from products other than utility commodities, (classified as Other Non-Utility Revenue (SF.IS.OtherNonUtilityRevenue)