5 Types of Assets That Are Written Off At Some Point of Time
Asset write-offs are an integral part of financial accounting for businesses and organizations. They involve recognising and removing assets from the balance sheet when they no longer hold any economic value. While write-offs may seem like a negative occurrence, they are a necessary step to accurately reflect the true financial position of an entity. In […]
What is a Forward Exchange Contract?
A Forward Exchange Contract is a financial agreement where two parties agree to exchange currencies at a predetermined rate on a future date. FECs allow individuals and businesses to lock in exchange rates for future transactions, providing certainty in an unpredictable international market. These contracts specify a fixed exchange rate and a predetermined maturity date, […]
What is the difference between a merger and a demerger?
A merger and a demerger are two different processes in corporate restructuring that involve the redistribution of assets, liabilities, and ownership of companies. But both terms have some fundamental differences from each other which we will try to understand in this post. What is a Merger? A merger is a business strategy where two or […]
What is the Swap Ratio?
A swap ratio is a term commonly used in mergers and acquisitions to determine the exchange ratio of shares between the acquiring and target companies. It is essentially the proportionate value at which the stocks of one company will be traded for the stocks of another company during a merger or acquisition. The swap ratio […]
How to Calculate Profit or Loss on Incomplete Contracts?
The profit or loss on incomplete contracts in cost accounting can be calculated using the percentage of completion method. This method recognizes profit or loss on a contract in proportion to the percentage of work completed. Profit of Loss on Incomplete Contract – Calculation To calculate the profit or loss on an incomplete contract using […]
The International Accounting Standards Board
The International Accounting Standards Board (IASB) is an independent, standard-setting organisation of the International Financial Reporting Standards Foundation (IFRS Foundation). This organisation was established on April 1, 2001, as a successor organisation to the International Accounting Standards Committee (IASC). It is in charge of establishing International Financial Reporting Standards as well as promoting the adoption […]
What is the Meaning and Scope of Accounting
Accounting is a fundamental aspect of any business, big or small. It involves the recording, analysis, and interpretation of financial information to make informed decisions. In this blog post, we will explore the meaning and scope of accounting, understanding its significance in finance and business operations. Meaning and Scope of Accounting According to the American […]
What is the Double Entry System of Book-Keeping?
The Double Entry System of bookkeeping is an accounting method where every financial transaction is recorded in at least two accounts. In the double entry system, each transaction is accounted for separately in the books, called the debit and credit. All these entries are shown on both sides of the ledger, usually in two columns, […]
What is Batch Costing? How is it Different From Job Costing?
Batch costing is a form of specific order costing in which costs are attributed to batches of products. A batch might also be called a ‘production run’. A batch is a group of related but distinctively different products that are produced at the same time. Each batch costs exactly the same as a job and […]
5 ways to improve liquidity ratios
Liquidity is the lifeblood of any organization, which can easily face its short-term obligations without a strain on finances. Liquidity ratios, like the current ratio and quick ratio, are key indicators of a company’s financial health, showing whether a company is capable of handling immediate liabilities with available assets. A healthy liquidity position inspires investor […]