Activity-based costing or ABC is popularly referred to as a method of costing whereby overhead costs are assigned to products and services. This method of costing recognizes that a relationship exists between the costs incurred and every other activity going on in the business. Activity-based accounting makes it possible to assign an indirect cost to […]
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Definition: Absorption costing is linking all production costs to the cost unit to calculate a full cost per unit of inventories. This costing method treats all production costs as costs of the product regardless of fixed cost or variance cost. It is sometimes called the full costing method because it includes all costs to get
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This is the summary of IFRS 1: First-time Adoption of International Financial Reporting Standard. The summary here is structure the same to full IFRS. It starts from Objective, Scope, Recommendation, and Measurement, and ended with Presentation and Disclosure. The summary of IFRS 1 First-time Adoption of International Financial Reporting Standard is just for your information
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Definition: Reliability Principle is the accounting principle that concern about the reliability of financial information that records and present in the entity’s financial statements. The principle of the reliability principle is that the transactions or event could records and present in the entity’s financial statements only if they could be verified with the reliable objective
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Definition: Monetary Unit Assumption is the accounting principle that concern about the valuation of transactions or event that entity records in its financial statements. In Monetary Unit Assumption, transactions or event could be recorded in the Financial Statements only if they could measure in the monetary term where those currencies are stable and reliable. USD
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Overview Materiality Principle or materiality concept is the accounting principle that concern about the relevance of information, and the size and nature of transactions that report in the financial statements. The main objective of the materiality principle is to provide guidance for the accountant to prepare the entity’s financial statements. And the most important thing
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Definition: The full disclosure principle is the accounting principle that requires an entity to disclose all necessary information in its financial statements and other related signification. This is to ensure that the lack of information does not mislead the users of financial information. The idea behind the full disclosure principle is that management might try not to
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Definition: The consistency principle is the accounting principle that requires an entity to apply the same accounting methods, policies, and standards for preparing and reporting its financial statements. The main objective of the consistency principle is to avoid any intention from management to use an inconsistent approach to manipulate the financial information to ensure their
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Definition: Conservatism principle is the accounting principle that concern with the reliability of Financial Statements of an entity. The conservatism principle provides guidance to accountants on how to records and recognizes the uncertainty outcome of revenues, expenses, assets, and liabilities in financial statements. This principle also intends to ensure that the users who use financial
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Overview: An internal Audit Charter is a formal document describing the primary purpose of an internal audit, its right, obligations, reporting line, authority, and code of ethics that an internal auditor should have. Generally, this document is approved by the audit committee and the board of directors. This document helps other departments, executive officers, and
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