Definition: Financial surplus

Category: National accounts

Financial surplus is the balance between financial income such as dividends, interests and similar income and financial expenditure such as interests paid and similar charges.

Financial surplus can be calculated as follows:
Financial income
- Financial expenditure
=Financial surplus

Dividends, interest and similar income can be defined as interest relating to short or long term bank deposits, income from loans and bonds, interest on agreed loans and debts of current account debtors, trade credits, accruals and deferred income from suppliers, currency gains, gains on the sales of share holdings and other similar income.

Interest and similar charges paid correspond to the remuneration of certain financial assets (deposits, bills, bonds and credits) characterised by the payment at predetermined dates of a fixed percentage of the nominal value of the asset. They comprise notably interest on loans, trade credit and credit of current account creditors. The following are often considered as financial charges in company accounting: prepayments and accrued income agreed with clients, currency losses (losses on exchange markets), losses on the sale of financial assets (fixed financial assets and investment current assets) and other such charges.