Residual income
Residual income (RI) is accounting measure of income minus a dollar amount for required return on an accounting measure of investment.
Definitions
According to Cost Accounting by Horngren, Datar, Rajan (14th edition),
- Residual income (RI). Accounting measure of income minus a dollar amount for required return on an accounting measure of investment.
According to Managerial Accounting by Braun, Tietz (5th edition),
- Residual income (RI). Operating income minus the minimum acceptable operating income given the size of the division's assets.