Liquidation of Companies | Meaning and Procedure
The liquidation of companies refers to the process of winding down operations and selling its assets to pay off its debts to external parties. It is essentially the process of dissolving a company and distributing its remaining assets to its creditors and shareholders. Reasons for liquidation There are several reasons why a company might be […]
What are calls-in-arrear and calls-in-advance?
Calls-in-arrear and calls-in-advance are related to the share capital of a company and how shareholders contribute to it. Here’s a breakdown: Calls-in-arrear Calls-in-advance: Key differences Conclusion Both calls-in-arrear and calls-in-advance are relevant to companies that issue shares in stages, calling for payments at different times. The legal framework regarding calls-in-arrear and calls-in-advance can vary depending on […]
What is the Difference Between Trading and Investing
In growing wealth in the financial market, two popular strategies are trading and investing. Though both require buying and selling of assets such as stock, bonds, or even cryptocurrencies, their methods, risk, and time frames are very different. Trading targets short-term price fluctuations, demanding frequent buying and selling and market analysis, while investing is a […]
Difference Between Fixed and Floating Rate of Interest
Interest rates form a vital aspect of the financial landscape. Whether you are considering taking out a loan for a major purchase or investing in a bond, understanding the difference between fixed and floating rates of interest is crucial. Let’s explore the difference between fixed and floating rates of interest, their advantages and disadvantages, and […]
Benefits of Computerised Accounting Systems
In today’s fast-paced, technology-driven world, businesses need to keep up with the latest advancements to remain competitive. One area where embracing technology is crucial is in financial management. Gone are the days of manual bookkeeping and piles of paperwork. The advent of computerised accounting systems has revolutionised the way businesses handle their finances. There are […]
What is a Consolidated Financial Statement?
A consolidated financial statement is a report of financial position and performance of a parent company and its subsidiaries as a single entity. It is an essential tool for investors, analysts, and other stakeholders to assess the overall financial position and performance of a group. Consolidated financial statements are particularly significant in the context of […]
What does mean reporting period in accounting
The reporting period, also known as the accounting period, refers to the specific timeframe for which a company’s financial performance and position are measured and reported. This timeframe serves as the foundation for a company’s financial statements, including the income statement, balance sheet, and cash flow statement. Common reporting periods Annual: Most companies follow the calendar […]
What is Meant By Impairment of Assets
In simple terms, an impaired asset is one whose market value has fallen below its value listed on the company’s balance sheet. Think of it as a valuable painting fading or a fancy smartphone becoming obsolete. These assets, once prized possessions, no longer command the same price they used to. Similarly, companies hold various assets […]
What is Securities Transaction Tax (STT)?
STT can be defined as a tax imposed on the purchase and sale of securities in the financial markets. Its primary role is to regulate and monitor securities transactions, ensuring transparency and compliance. The scope of STT encompasses various types of transactions, including equity, derivatives, and mutual funds. Its applicability may vary across different financial […]
Indirect Method of Preparing Cash-Flow Statement
A cash flow statement is a crucial financial statement that provides insights into a company’s liquidity and its ability to generate cash. When it comes to preparing a cash flow statement, there are two methods: direct and indirect. In this article, we will focus on the indirect method and explore its significance in reconciling net […]