What is impairment? Impairment is a sudden decrease in the value of assets. It is booked when the net book value of the asset exceeds the recoverable amount. The formula to calculate impairment is as follows: Net book value – Recoverable Amount = Impairment The recoverable amount of asset is higher of value in use […]
How does fixed asset impairment affect the financial statements? Read More »
It does not matter if you are running a small, medium company or a large corporation, or organization, whether profitable or not for profit, you are required to prepare the financial statements to record all of the financial-related transactions that occur daily in your organization to accounting system so that you could establish the financial
What Are the Required Financial Statements Under GAAP & IFRS? Read More »
Financial Statements: According to international accounting standards and generally accepted accounting principles, every entity is supposed to prepare annual financial statements, including the following: These statements or reports clearly explain how the business is performing financially so far. It includes and reports every transaction that has occurred throughout the year. After preparing financial statements, the
How Are Inventories Reported on Financial Statements? Read More »
Introduction: Managing the cash flow of your business by budgeting is an important technique that you can adopt instead of spending a hectic time counting and remembering where all the money came from and went to. The cash budget allows you to estimate all your revenues and expenses beforehand and works as a guideline to
Budgeted Cash Flow Statement – How to prepare it? Read More »
Balance sheet: A balance sheet is a financial statement that is prepared annually at the end of each accounting period reporting the levels of assets, liabilities, and equity that the company owns at that time. It is also called a statement of financial position as it is reporting the company’s position in the financial term.
Budgeted Balance Sheet: What Is It? And How Does It Work? Read More »
Introduction: When an independent auditor gives his opinion/ report on the financial statements of the company its true and fair presentation is called audited financial statements. It is the responsibility of the company’s management is to prepare the company’s financial statements and related disclosures. These audited financial statements are then verified and audited by an
Audited Financial Statements – Why Is It Importance? Read More »
Introduction Business is the asset of every businessman and businesswoman, and the assets of the business are fixed assets and inventory. At the start of business studies, most students are confused about fixed assets and inventories. In actual business, there are clear differences in both of the terminologies. Here are the definitions and the differences
Inventories Vs. Fixed Assets: Why and What Are They Different? Read More »
Assets are the most important part of the business, without assets no one even thinks to start a business. Assets are the main thing which generates revenue and this revenue increase profit and results in the growth of the business from low to high level. Hence, in the business world, it is very important to
What Is the Difference Between Assets and Current Assets? Read More »
Fixed assets are the assets that are purchased for a longer period of time to be used and are not likely to be converted into cash in a short period of fewer than twelve months. Examples of fixed assets are land, building, and equipment, etc. The fixed assets are at risk of being misreported, which
What are the key internal controls for fixed assets? Read More »
No one can deny the importance of assets in the business world. Because assets create profit and also grow the business from a low to a high level. Assets have different types, but the most important are current and fixed assets. Fixed assets work for a long period of time, and current assets work in
Why Don’t We Depreciate Inventory? (Explained) Read More »