Financial Statements

The International Accounting Standards require companies and business entities to report their financial information in their financial statements. The balance sheet is the health statement of a business entity that reflects the financial obligations, assets, and shareholder’s equity. Different standards under IAS dictate measurement, recognition, and disclosure of varying assets and liabilities of the balance […]

Liabilities in a Balance sheet are the commitments of the company to external parties. These are categorized as current (payable under 12 months) and non-current (payable in more than 12 months) liabilities. Defined under the IFRS: “A company’s present liability is the obligation stemming from previous events, which are to result in an outflow of

Classification When a corporation obtains an intangible asset that depreciates over time, it is important to reduce its value on its balance sheet over time. Account of amortization expense is to be debited, while accumulated amortization is to be credited. The sum of amortization expense is known as accumulated amortization, which is documents intangible assets

Financial statements can be represented in a simple form or as classified statements. Classified statements represent the assets, liabilities, expenses, and revenues of an enterprise in a more detailed way. A classified balance sheet breaks down the asset and liabilities into sub-categories, and each category corresponds to a group of assets or liabilities of similar

What Are Intangible Assets? Under IAS 38.8, an intangible asset is defined as, It is an identifiable non-monetary asset that has no physical existence. It is a resource held by a company due to a past event(patent creation by research), and an economic benefit in the future is expected from it. The same standard has

It is said that a balance sheet is a snapshot of a company’s financial health. However, the snapshot becomes immaterial if meaningful information cannot be drawn from it. To maintain the fair representation of all information, many companies and enterprises use classified balance sheets. Classification of assets plays a pivotal role for a business when

Computer equipment is considered one of the most significant components of fixed asset items in an entity’s balance sheet. This kind of asset usually has more than twelve months and is classified as a non-current asset, initially recognized at cost and subsequently valued at cost less depreciation and impairment. The classification, measurement, and recognition of

Furniture and fittings are the number current that the company used for supporting its daily operation other than land, building, machinery, computer equipment, and other non-current. These noncurrent assets are recording in the company’s balance sheet at the end of the accounting period. It is valued at cost initially and subsequently value at cost less

What are Leasehold Improvements? Leasehold Improvements are defined as modifications made to a leased space or a leased asset to make it more suited to the specific needs of the given tenant. When a rental or a tenancy agreement is signed upon, there are several different components included. Leasehold improvements tend to be one of

The inventory is considered to be a hazardous item in the balance sheet. The risk even increases if the business operates in the manufacturing sector. The reason is that business operating in manufacturing segment is expected to have a greater quantity of raw material, work in process, and the finished goods.  A value measurement for