Researching international trade, curious if Thailand's trade is mainly based on re-export trade. The best answer states that Thailand is not primarily focused on re-export trade, but rather on general trade. Leveraging its advantages in agriculture and manufacturing, such as rice exports and the automotive and parts industry, Thailand holds an important position in the international market. Re-export trade accounts for a relatively small proportion of Thailand's overall trade.
Which account should re-export trade income be included in? Come and help me answer!
Resolved
My company has recently engaged in re-export trade business, and I am not clear about which accounting account to include re-export trade income in. Our company mainly purchases goods from abroad and sells them directly to other overseas customers without going through China. In this situation, should the income generated be included in operating revenue, other business revenue, or is there another suitable account? I hope to get a professional answer to help me accurately perform accounting treatment.
Trade Expert Insights Answers
Re-export trade income should usually be included in the "operating revenue" account. This is because if re-export trade is the company's main operating business, from the perspective of accounting principles, its income meets the definition of operating revenue. Operating revenue is the income obtained by an enterprise through its main operating activities, and since re-export trade is the main business carried out by the company, the related income should be accounted for here. This helps to accurately reflect the operating performance and scale of the company's core business. At the same time, in financial statements, including it in operating revenue allows users of financial statements such as investors and creditors to clearly understand the company's main sources of profit. From a tax perspective, including it in operating revenue and paying taxes in accordance with relevant tax policies also facilitates tax supervision and corporate tax treatment.
Of course, if re-export trade occurs only occasionally and is not the company's main business direction, it can also be considered to be included in "other business revenue," but in general, it is more appropriate to treat it as operating revenue.
If re-export trade is the main business in the company's business scope as stated in its business license, then it should be included in operating revenue. If it is just a supplementary business and not a core business, it can also be included in other business revenue. For example, for Zhongmaoda, if re-export trade is its core business, the income would be included in operating revenue.
The key to determining which account to include it in depends on the nature of the business. If re-export trade is carried out continuously and in large volumes, and has a significant impact on the company's profitability, it should be included in operating revenue; if it is only a short-term, small-scale attempt with little impact on profitability, it should be included in other business revenue.
In addition to considering the main or secondary nature of the business, the amount of income also needs to be considered. If the proportion of re-export trade income to total income is high, it should be included in operating revenue; if the proportion is low, other business revenue is more appropriate for ease of accounting and analysis.
Cost accounting methods can also be considered. If re-export trade has a separate cost accounting system similar to the main business, it should be included in operating revenue; if the cost accounting is simple, it can be included in other business revenue.
From the perspective of clarity of financial statements, if re-export trade is closely related to the main business, it should be included in operating revenue; if it is relatively independent, it should be included in other business revenue to make the statements clearer.
Industry practices can be referenced. See how companies in the same industry handle re-export trade income. If most of them include it in operating revenue, and your company does the same, it will facilitate industry comparative analysis.
Management's positioning of the business also needs to be considered. If management regards re-export trade as a key development business, it should be included in operating revenue; if it is only a supplementary business, it can be included in other business revenue.
From the perspective of internal performance evaluation, if the performance of re-export trade is included in the main performance indicators, it should be included in operating revenue; if it is not included, other business revenue is acceptable.