Sundry Income: Definition, How It Works in Business, and Examples

What Is Sundry Income?

Sundry income is generated from sources other than a company's normal income-generating business operations. This includes any income not generated by the sale of the company's products and services.

Sundry income is likely to be less predictable in nature than revenue from a business's primary operations because the associated activities are often irregular in nature and cannot be seen as guaranteed sources of income over the long term.

How Sundry Income Works

Sundry income is a nonmaterial source of income and is generally trivial in relation to a company's income from operations. Even though sundry income may not make up a large part of a business’s income, this does not mean the amounts are negligible. There is no limit to the amount of income that may qualify as sundry income because the defining characteristic is based on the irregularity of the fund source and not the amount of funds generated.

On the income statement or balance sheet, sundry income may also be listed as miscellaneous income or other operating income.

Sundry income must be recorded on financial statements and balance sheets, as it has an effect on a business’s net worth and needs to be reported to shareholders. Additionally, sundry income may come with tax implications that must be addressed by the business. The income must be reported to the Internal Revenue Service (IRS) along with the income generated from normal business operations.

Examples of Sundry Income

Sundry income may include income from a variety of sources, the nature of which may change from one accounting period to the next. For example, late fees, royalties, profits on the sales of minor assets, or foreign exchange gains may qualify as sundry income depending on the nature of the business involved. Income from sources such as interest may be included in sundry income depending on whether a company has substantial interest income due to large cash balances. In those instances, interest income may be shown as a line item separate from sundry income.

Special Considerations

While sundry income includes all the miscellaneous sources of income a business may generate, sundry expenses encompass the irregular, small expenses that are not otherwise assigned within the account.

While the nature of sundry expenses may vary from one business to the next, it generally does not include regular operating expenses such as rent or mortgage payments, depreciation, employee pay, and benefits, or utility payments. By listing small, irregular amounts under sundry expenses, a company's accounting department saves itself the effort of having to precisely allocate each expense.

However, if these expenses become regular and include larger amounts, they will no longer qualify as sundry. Instead, they will need to be reported separately with a precise description in the balance sheet.

Sundry assets, frequently known as other current assets (OCA), are uncommon or insignificant things of value a company owns, such as a piece of unimproved land or restricted cash. A company may list and describe these assets in its financial statement footnotes. If the company sells these assets, it will record the resulting income as sundry or miscellaneous income on its income statement.