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Latest In Accounting

Sure, most people know that interest is the cost of borrowing money or the income from saving money. And they know that they should earn a return on their investments. However, when put in a specific borrowing, saving, or... 

Latest In Finance

In addition to the measurement accounting principles that guide the values placed on the shareholder’s equity in a Balance Sheet, there are accounting principles specifying the informative disclosures that are necessary... 

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Fixed assets are those assets that are used in a productive capacity, are tangible (have physical substance), are relatively long-lived, and provide future benefit that is readily measurable, sometimes referred to as property,... 

Recent Articles
Shareholder’s Equity Disclosures and Footnotes...

In addition to the measurement accounting principles that guide the values placed on the shareholder’s equity in a Balance Sheet, there are accounting principles specifying the informative... More »

How Board of Directors May Prevent Deceptive Acc...

A Board of Directors of a company is supposed to represent the shareholders prevent the company from using deceptive accounting tactics that mislead investors. Any board member of any... More »

Accounting For Accrued Expenses...

One of the primary tasks of the accountant during the period-end closing process is the calculation of expense accruals, of which there are potentially a great number. There will be... More »

How to Compute Operating and Financial Leverage...

Leverage is that portion of the fixed costs which represents a risk to the firm. Operating leverage, a measure of operating risk, refers to the fixed operating costs found in the firm’s... More »

Accounts Receivable Management and Decision Maki...

Consideration should be given to the company’s investment in accounts receivable since there is an opportunity cost associated with holding receivable balances. The major decision... More »

Revenue And Costs Control and Evaluation...

Revenue and cost control are critical to any businesses. A company can improve its bottom-line (profit) and overall operations by analyzing, planning, monitoring, and controlling revenue... More »

Identifying Relevant and Irrelevant Costs...

Contracting with other firms to obtain necessary goods and services-a process called outsourcing-emerged as a key management strategy during the nineties. Managers hope to benefit from... More »

Financing Growth [Working Capital Adjustment]...

On my post “Overcome Seasonality On Working Capital”,  I have addressed the problem of a manager selecting the optimal level of working capital for the case of companies facing... More »

Audit Committee and Its Key Roles [An Overview]...

The audit function is crucial for ensuring the integrity of a company’s financial systems, which includes not only its financial results but also the control systems and code of ethics... More »

Accounting For Acquisition...

On any acquisition process, once due diligence and valuation of acquiree is completed, the process continued to recording (accounting) the acquisition on the company’s book. And this... More »

Advantages and Disadvantages for Outsourcing the...

Is it possible to outsource the accounting function? The answer is “YES”. The accounting function could be outsourced, though this is usually limited to only a few tasks within... More »

Tax Strategy and Its Objectives...

The obvious objective of tax strategy is to minimize the amount of cash paid out for taxes. However, this directly conflicts with the general desire to report as much income as possible... More »

Understanding Liabilities Subject To Compromise...

If a company files for bankruptcy, there is a strong likelihood that its creditors will not be paid in full. Upon such a filing, the “best interests of creditors” test is performed.... More »

Depreciation Methods [IAS 16]...

Depreciation is designed to spread an asset’s cost over its entire useful service life. Its service life is the period over which it is worn out for any reason, at the end of which... More »

Comprehensive Cash Transfer Controls...

There are many types of cash transfers a company can choose for certain payments and payees. However, cash transfers can subject a company to a considerable risk of loss, and so require... More »

Accretive Versus Dilutive Equity Transactions...

In any business decision utilizing company resources, management must ascertain whether or not an asset purchase makes the most sense for its owners. This is true on a micro or macro... More »

10 Myths about Dividends Investing...

Stock market investors and analysts often take sides on the issue of investing in dividend stocks. On one side are the cheerleaders who believe dividend stocks are the next best thing... More »

Credit Risk of Bonds [An Overview]...

To raise funds, firms often issue bonds, which obligate the issuer to make payments of interest, and sometimes principal, to the lender on specified dates. Bond is a form of liability.... More »

Valuation Of Computer Software...

A fair value estimate for computer software must be considered in the context of the fair value in a hypothetical transaction. Does the software value make sense based on “the amount... More »

10 Systematic Adjustments On Financial Statement...

The main objective of adjustments on financial statements is to determine the true earning power of the entity in the past. Doing this requires elimination of all nonrecurring items... More »

More Advance with Cost of Capital Analysis...

The cost of capital is defined as the rate of return that is necessary to maintain the market value of the firm (or price of the firm’s stock). Financial managers must know the... More »

Corporate Planning Models [An Overview]...

A corporate planning model is an integrated business planning model in which marketing and production models are linked to the financial model. More specifically, a corporate model... More »

Auditing: Attestation Standard [A Closer Look]...

At one time attest services provided by CPAs were limited to expressing a positive opinion on historical financial statements on the basis of an audit made in accordance with generally... More »

Consolidated and Separate Financial Statements [...

IAS 27 shall be applied in the preparation and presentation of consolidated financial statements for a group of entities under the control of a parent. This Standard does not deal with... More »

Accounting For Fixed Asset Purchase and Cost Cap...

Fixed assets are those assets that are used in a productive capacity, are tangible (have physical substance), are relatively long-lived, and provide future benefit that is readily measurable,... More »

Personal Banking Best Practices...

Not that many years ago, if you’re in the United State, you would choose a bank from the few available in your town or city. You visited the bank and filled out paperwork to open... More »

Determinants Of Financial Needs for Operation [F...

In order to correctly understand the mechanics and implications of a firm’s working capital, we need to take into account a firm’s financial needs for operation, or FNOs. A firm’s... More »

Intangible Assets: Identification And Valuation...

Intangible assets (resources) play a fundamental role in economies’ change, from traditional scale-based manufacturing to new innovation-oriented activities. Intellectual property,... More »

How To Report PostYear-end Events...

IAS 10 addresses the extent to which anything that happens during the postyear-end period when the financial statements are being prepared should be reflected in those financial statements.... More »

Percentage-of-Completion Methods [A Closer Look]...

IAS recognizes the percentage-of-completion method as the only valid method of accounting for construction contracts. Under an earlier version of IAS 11, both the percentage-of-completion... More »