What are secondary activities?

Secondary activities are any activities that do not part of its basic business strategy and mission. In a simple example, the rental of unused factory space for manufacturers is secondary activities, as the company's primary activities include production and production, not leasing real estate. These activities support the primary goals of business and make it more efficient by helping to reduce costs, make the use of business assets and maintain a positive image.

The nature of secondary activities can vary very depending on industry. No primary activities depend on these business processes; In the above example, production of the company does not rely on the rental of unused space. The secondary activity in this example increases efficiency by profiting from assets that would otherwise remain unoccupied. This reduces operating expenditures and creates another flow of income for the company and offers a new advantage.

Sale OLD Asseps for secondary activities MohOU be examples of secondary activities, TS, TS, court disputes in court and management of financing agreements. They do not directly apply to the primary purpose of doing business and may be peripheral to its goals. The company does not depend on income and are not part of the normal scope of business practice. Businesses can be reluctant to devote themselves to the staff of the management of these activities and instead decided to close them to other companies. This can maintain low costs and prevent the creation of an unnecessary separation.

companies must be responsible for secondary activities on financial submissions such as taxes and annual reports. These documents should include detailed disorders of income and expenditure from these activities. Accountants may assist companies in deciding on the types of activities that need to be performed on the basis of their financial impact; For example, the sale of Vbudovy acant may have a net loss for business while their rental could provide a flowrevenue and maintain assets in books for depreciation and other tax benefits.

These activities may appear in a separate part of the financial statements for shareholders and interested public. They can provide an interesting view of the company's financial situation; For example, if more lawsuits were resolved in one year, the company's cash registers could intervene, and in the coming year it may be less able to collect capital for operation. On the contrary, companies that bring revenue from free property and other secondary activities can be in a stronger financial situation.