In accounting, a liability represents an obligation that companies accumulate due to past events. Similarly, it results in an outflow of economic benefits during a future period. In simpler words, liability is any amount owed to third parties that companies must settle. This settlement can occur any time in the future. Based on the terms […]
What are Non-current Liabilities? How Do You Account For It? Read More »
As an accountant, understanding the differences between GAAP and IFRS is crucial. Most accounting treatments within both frameworks match. However, some areas require companies to treat items differently. While these differences may seem minor, they can substantially impact financial statements. While accountants may understand those impacts, most stakeholders may not know them. While most stakeholders
Can US Companies Use IFRS? Read More »
Accounting standards include standardized guiding principles that help companies in various accounting matters. They help determine the policies and practices used during the financial accounting process. Similarly, accounting standards improve the transparency of this process while promoting better financial reporting. These standards also facilitate financial accountability. For most companies, following accounting standards is mandatory. In
Why IFRS Is Better Than GAAP? 5 Reasons You Should Know Read More »
Companies operate as separate legal entities. They obtain finance from various parties to conduct business with others. Consequently, they may profit from their activities. Later, they use those profits to compensate their investors. The most prevalent forms of payments to them include dividends and interest. However, companies must also report their operations to those investors.
Why are IFRS Important? 5 Reasons You Should Know Read More »
Companies prepare financial statements to report their operations to their stakeholders. However, they need consistency when presenting the information. On top of that, they must also follow similar rules that define the basis for preparing financial statements. These rules come from accounting standards. These standards play a crucial role in dictating how companies record and
Who Issue IFRS? And How Is It Develop? Read More »
The primary objective of reporting financial information to stakeholders is to provide useful data for decision-making. This information allows them to interpret a company’s activities and operations. Based on it, stakeholders can make various decisions regarding their relationship with the company. There are several tools that companies may use when reporting financial information. However, they
Does IFRS Use Historical Cost? Read More »
The IFRS (International Financial Reporting Standards) include a set of accounting standards. Usually, they apply in many jurisdictions and dictate how companies account for financial transactions. Some companies may also use GAAP (Generally Accept Accounting Principles). These standards may have some similarities. However, they differ in various critical areas. Each has a set of rules
What Costs Can Be Capitalized Under The IFRS? Read More »
Accounting incorporates various tasks that companies must perform to deal with financial transactions. This process involves recording, summarizing, analyzing, and reporting financial information. However, the most relevant branch of accounting is financial accounting. Within this branch, companies seek to prepare financial statements. These statements provide details of a company’s operations and activities for a period.
What Are the Features And Characteristics of Managerial Accounting? Read More »
Decision-making is a crucial part of any management team. These decisions usually relate to the activities and operation of a company. For most companies, the decisions made by managers are crucial in helping increase profitability and reduce costs. Even fundamental functions in a company will fail without the right decisions made by the management. The
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Companies obtain finance from various sources. Usually, this finance comes from equity holders, which constitutes equity finance. This finance is perpetual and can be crucial in helping companies start their operations as startups. However, as companies progress, they have more options available in meeting their financing needs. The other finance source that companies can choose
How Does the Current Portion of Long-term Debt Affect Cash Flow Statement? Read More »