Account 711- Other income
1. Accounting principles
a) This account is used to record other income, revenues not from operating activity of business, including:
- Revenues from transferring, liquidating fixed assets;
- Difference between the fair value of assets divided from Business cooperation contract is higher than the cost of capital investment in assets under joint control;
- Different interest from revaluation of material, good, fixed assets contributed in Joint venture Capital, interest in allied companies, other long - term investments;
- Revenues from asset sales and lease operations;
- Taxes payable when selling goods or providing services, but later reduced or returned (export tax is returned, VAT, special excise tax, environmental protection tax payable is reduced later);
- Collecting contractual fine from customer;
- Collecting compensation of third parties in order to make up lost assets (eg the collection of compensated insurance, compensation for displacing business establishments and similar amounts);
- Collecting doubtful debts which have been written off;
- Collecting liabilities which creditors are not determined;
- Bonus from customers relating to consumption of good, products services which are not included in sales (if any);
- Revenues in cash or in kind from gifts donated by organization individuals;
- The value of unreturned promotional goods;
- Other Income besides above mentioned.
b) When there is a certain possibility of fines collected from breach of contract, accountants must consider the nature of fines to account in accordance with each specific case, under the following principles:
- For sellers: All fines for breach of contract collected from buyers outside the contract value are recorded in other income.
- For buyers:
Fines are essential purchase discounts, reducing payments for suppliers are accounted for as decrease in value of assets or payments (not accounted for in other income) unless the relevant assets are liquidated or sold.
For example, when the contractor delays the progress, investors are entitled to fine the contractor which allows to recover a portion of amounts paid to the contractor, such amounts are recorded a decrease the value of construction assets. However, if fines collected after the assets have been liquidated, sold, the fines are recorded in other income.
Other fines are recorded a other income in the incurred period, eg; the buyer is entitled to reject the goods and fine the seller if goods are not timely delivered as specified in the contract, fines receivables are recorded a other income when they are surely received. In case the buyer receives
the goods and fines are deducted from the amount payable, the value of the goods purchased is recorded at the amount actually payable, accountants do not record fines in other income.

2. Structure and contents of account 711 - Other income
Debit side:
- VAT payable (if any) computed under direct method on Other Income of business which pay VAT under direct method.
- At end of account period, posting Other Income generated during period to Account 911 ―Income Summary‖
Credit side: Other income incurred during period.
Account 711 “other Income” does not have ending balance.

3. Method of accounting for several major transactions
Accounting of ―other Income‖ generated from transferring liquidating of fixed assets:
- Recording revenues from liquidating, transferring fixed assets :
Dr 111,112,131 (total settlement price)
Cr 711 - Other Income (revenues net of VAT)
Cr 3331 - VAT payable (33311)(if any).
- Expenses incurred for transferring liquidating operations of fixed assets, record:
Dr 881 - Other expenses.
Dr 133 - Deductible VAT (If any)
Cr 111, 112, 141, 331,...(Total settlement price).
- Record: decrease cost of fixed assets liquidating or transferred
Dr 214 - Accumulated Depreciation (value of depreciation)
Dr 811 - Other expenses (Net book value)
Cr 211 - Tangible fixed assets (cost)
Cr 213 - Intangible fixed assets (cost)
b) Accounting of ―Other income generated from revaluating material, good and fixed assets which have been invested in subsidiary companies, associate companies, contributed in other long-term investments:
- When investing in subsidiary companies , joint venture, associate companies , other long-term investment under form of contributing materials, goods, which are revaluated in joint agreement between parent companies and subsidiary companies, investors and associate companies. In case this revaluation of materials goods is greater than book value of materials or good, record:
Dr 221, 222, 228 (price of revaluation)
Cr 152, 153, 155, 156 (book value)
Cr 711 - Other income (the difference between the reevaluated prices higher than the book price of materials and goods).
- When investing in subsidiary companies , joint venture, associate companies , other long-term investment under form of contributing fixed assets, which are revaluated in joint agreement between parent companies and subsidiary companies, investors and associate companies. In case this revaluation of fixed assets is greater than the net book value of fixed assets, record:
Dr 221, 222, 228 (price of revaluation)
Dr 214 - Accumulated Depreciation (value of accumulative depreciation)
Cr 211, 213 (Costs)
C<}0{>Cr 711 - Other Income (the difference between revaluation value of fixed assets higher than the net book value of fixed assets)
c) Accounting ―Other Income‖ generated from selling and leasing fixed assets in financial lease:
- In case transactions of selling and leasing back fixed assets with price higher than net book value of fixed assets, when procedure of selling fixed assets is finished, accountants will base on invoices and relating documents, record:
Dr 111,112,131 (total settlement price)
Cr 711 - Other Income (the net book value of fixed assets sold and leased back)
Cr 3387 - Unearned revenues (Positive difference between price and net book value of fixed assets)
Cr 3331 - VAT payable.
Simultaneously, recording decrease in fixed assets:
Dr 711 - Other Income (the net book value of fixed assets sold and leased back)
Dr 214 - Accumulated Depreciation ( if any)
Cr 211 - Tangible fixed assets (cost of fixed assets)
- In case selling and easing back with price lower than net book value of fixed assets. When finishing procedure of selling fixed assets, account will base on invoices and other related documents, record:
Dr 111,112,131 (total settlement price)
Cr 711 - Other Income (selling price of fixed assets)
Cr 3331 - VAT payable if any).
Simultaneously, recording decrease in fixed assets:
Dr 811 - Other expenses (selling price of fixed assets)
Dr 242 - Prepaid expenses (Negative difference between selling price and net book value of fixed assets)
Dr 214 - Accumulated Depreciation ( if any)
Cr 211 - Tangible fixed assets (cost of fixed assets)
Entry recording leased property and liabilities of financial lease, periodical lease payments, complying with regulation at Account 212 - Financial lease fixed assets.
d) Accounting ―other Income‖ generated from selling and lease - back transactions of operating leased fixed assets: When selling and leasing back of fixed assets, accountants will base on VAT invoices and related documents of selling fixed assets, to record selling transactions in following cases:
- If selling price is agreed on a reasonable level, then loses or profits must be recorded immediately during the period. To record revenues from fixed assets sales, record:
Dr 111, 112, 131,...
Cr 711 - Other Income (selling price of fixed assets)
Cr 3331 - VAT payable if any).
Simultaneously, recording a decrease in fixed assets (as in above point c)
- If price of selling and lease - back of assets is lower than the reasonable price, but the leasing price is lower than the leasing price in market, then this loss shall not be recorded immediately, but shall be allocated gradually in accordance with lease payments during leasing assets. Base on the VAT invoices and documents related to fixed assets sales, the income from selling fixed assets, record:
Dr 111, 112,...
Cr 711 - Other Income (selling price of fixed assets)
Cr 3331 - VAT payable.
- Simultaneously, recording decrease in fixed assets as follows :
Dr 881 - Other expenses.
Dr 242 - Prepaid expenses.
Dr 214 - Accumulated Depreciation ( if any)
Cr 211 - Tangible fixed assets (cost of fixed assets)
- Periodically, when allocating the loss of selling and subleasing operating leased fixed assets (the difference between the selling price less than fair value) in the cost of production and trading in period in accordance with payments of lease in the time when such asset is expected to use, record :
Dr 623, 627, 641, 642
Cr 242 - Prepaid expenses.
- If price of selling and lease - back of assets is higher them reasonable price, then amount in excess of reasonable price shall not be recorded immediately as a profits during period, but shall be allocated during the entire expected useful time of that assets, and difference between reasonable value and net book value shall be recorded immediately as a profits during period.
Base on VAT invoices of fixed assets sales, record:
Dr 111, 112, 131,...
Cr 711 - Other Income (computed with reasonable value of fixed assets)
Cr 3387 - Unearned revenues(Positive difference between selling price and reasonable value of fixed assets)
Cr 3331 - VAT payable if any).
Simultaneously, recording a decrease in fixed assets sold and subleased (as in above point c)
Periodically, when allocating positive difference between selling price and fair value of fixed assets sold and subleased recorded a decrease in the cost of production and trading in period in accordance with payments of lease in the time when such asset is expected to use, record :
Dr 3387 - Unearned revenues
Cr 623, 627, 641, 642.
dd) When warranty period of construction work is over, if construction work is not guaranteed or payables provision for construction work warranty is greater than expenses actually incurred, then unspent payables provision for warranty of construction work must be returned, record:
Dr 352 - Provision for payables.
Cr 711 - Other Income
e) Recording sums received from fines
- If the fines are recorded a decrease in value of assets, record :
Dr related accounts
Cr 151, 153, 154, 156, 241, 211…
- If the fines are recorded in other income, record:
Dr related accounts
Cr 711 - Other Income
g) Recording amounts compensated by a third party (such as cash compensation insurance, compensation for displacing business establishments ...), record :
Dr 111, 112,...
Cr 711 - Other Income
- Expenses relating to handle damages in cases business has bought insurance, record:
Dr 881 - Other expenses.
Dr 133 - Deductible VAT (If any)
Cr 111, 112, 152,...
h) Accounting for uncollectible receivables which had been written off, but now have been collected:
- If having actually uncollectible receivables and must be written off, accountants will base on social insurance to write off debt, record:
Dr 229 - Provision for asset losses (2293) (provision set up)
Dr 642 - General administration expenses (If provision has not been budgeted)
Cr 131 - Customer receivable
- When collecting doubtful debts that have been written off, record :
Dr 111, 112,...
Cr 711 - Other Income
If creditor of liabilities was not identified, the debt was written off and charged to Other Income, record:
Dr 331 - Suppliers payables
Dr 338 - Other payables
Cr 711 - Other Income
k) Accounting for taxes payable when selling goods or providing services which are later returned or reduced:
- Upon receipt of the decision of the competent authority of the amount refunded or reduced, record :
Dr 3331, 3332, 3333, 33381
Cr 711 - Other Income
- When state budget returns in cash, record :
Dr 111, 112.
Cr 3331, 3332, 3333, 33381.
l) In case business is financed, donated with materials, goods, fixed assets, ..., record:
Dr 152, 156, 211,...
Cr 711 - Other Income
m) In case of transformation of business ownership (except transformation of enterprises with 100% state capital into joint-stock companies), if allowed to revaluate of enterprises at the time of transformation, for assets assessed increase, record :
Dr related accounts
Cr 711 - Other Income
n) If enterprises trading receive goods (without payment) from manufacturers, distributors for advertising, promotion for customers buying goods from manufacturers, distributors. At the end of the promotion program, if the unused promotional goods are not returned manufacturers, accountants record the value of unreturned promotional goods as other income, record :
Dr 156- Goods (equivalent value of the same type)
Cr 711 - Other Income
o) At end of account period, computing and recording VAT payable under direct method of Other Income, record:
Dr 711- Other Income
Cr 3331- VAT payable.
p) At end of period, accountants post Other Income generated during period to Account 911 ―Income Summary‖
Dr 711- Other Income
Cr 911 - Income Summary

Source: Circular 200