What Are the Limitations of Financial Accounting?
Many of us still belief that the financial accounting system is perfect, and it would be a miracle to find something wrong with the financial accounting system. This belief is simply a delusion, and it has been said that people who don’t know the history of accounting should not talk about accounting. However, in today’s […]
What is a Bank Reconciliation Statement?
Bank Reconciliation Statement A bank reconciliation statement is a document that reconciles the balances of a bank’s checking account with the bank’s reported financial statements. A bank reconciliation statement is a document that lists all of the transactions in an account, both deposits and withdrawals, and reconciles the account against the bank’s records. This is […]
Treatment of Goodwill: IFRS v. US GAAP
When it comes to accounting principles, the treatment of goodwill can vary significantly between International Financial Reporting Standards (IFRS) and United States Generally Accepted Accounting Principles (US GAAP). In this blog post, we will explore the differences in the treatment of Goodwill under IFRS and GAAP and the implications for financial reporting. Also Read: Write […]
What is zero-based budgeting? Meaning and Explanation
Zero-based budgeting, or ZBB, is a strategic approach to financial planning that expects each expense to be justified starting from zero. Unlike the traditional method of budgeting where adjustments are made incrementally on previous budgets, in ZBB each budgeting cycle develops a new financial baseline. Such methodology ensures resource allocation according to requirement and prioritization […]
Meaning and Objectives of Preparing Cash Flow Statement
Cash is critical to a business’s economic life. A business requires cash to pay suppliers, incur daily expenses, and pay salaries, wages, interest, and dividends, among other things. Indeed, capital is to a commercial enterprise what blood is to a physical organism. As a result, it is critical for a firm to keep a healthy […]
What are Ind-ASs and When They Are Applicable?
What is an Ind-AS? An IND-AS is an accounting standard prepared in India in compliance with IFRS. IND AS is currently tracked by all listed firms and those unlisted companies whose net worth is more than equal to 250 crores. Indian Accounting Standards (abbreviated as Ind-AS) in India accounting standards were established under the supervision […]
Introduction to Contract Costing – Meaning and Types
The term ‘contract’ refers to the agreement between two parties to do a particular task within a given time frame. Typically, a contract involves a substantial amount of money and is performed on-site. A contract involves two parties, namely the contractor and the contractee. The individual or entity implementing the terms and conditions of the […]
IAS 1 Presentation of Financial Statements
IAS 1 is the foundation of the IAS framework and sets out the overall requirements for the presentation of financial statements. It requires companies to present their financial statements in a way that is clear, concise, relevant, reliable, and comparable. IAS 1 specifies the overall criteria for financial statement presentation, as well as rules for […]
What Are 12 Accounting Concepts? – A Summary
Accounting Concepts are the underlying assumptions used to produce a business’s financial statements. The term “concept” refers to an idea or thought. Concepts are the fundamental assumptions and conditions that underpin accounting principles. There are 12 accounting concepts. These are explained below: Money Measurement Concept The money measurement concept (alternatively referred to as monetary measurement) emphasises that […]
When changes in accounting policies are permitted?
Though ‘consistency’ is a fundamental accounting assumption, it does not imply that accounting policies adopted once cannot be altered ever in the future. Changes in accounting policies may sometimes be required to maintain the quality and comparability of data. Changes in accounting policies are permitted and justified in the following cases: Notably, accounting policy changes […]