Accounting Tools

APRIL 17, 2024

These costs include the initial investment , future additional investments, and annually recurring costs, minus any salvage value. Life cycle costing is more heavily used by businesses that place an emphasis on long-range planning, so that their multi-year profits are maximized. We examine these areas below.

Customer Service 75

Customer Service Budgeting Financial Analysis Cost Accounting 75

Accounting Tools

FEBRUARY 25, 2024

What is Net Present Value? Net present value (NPV) discounts the stream of expected cash flows associated with a proposed project to their current value, which presents a cash surplus or loss for the project. It is used to evaluate a proposed capital expenditure. Generally, NPV is the more heavily-used method.

Financial Analysis 75

Financial Analysis Budgeting 75

Accounting Tools

MAY 9, 2024

This account is paired with the fixed assets line item on the balance sheet , so that the combined total of the two accounts reveals the remaining book value of the fixed assets. Otherwise, only presenting a net book value figure might mislead readers into believing that a business has never invested substantial amounts in fixed assets.

Financial Statements 52

Financial Statements Auditing Accounting Accounting 52

Accounting Tools

MAY 7, 2024

What is Book Value? Book value is an asset's original cost , less any accumulated depreciation and impairment charges that have been subsequently incurred. For example, it is the stated amount of all equity listed on a company’s balance sheet, and is supposed to be indicative of the value of the business.

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Accounting Tools

MAY 7, 2024

This is a concern when reviewing the balance sheet , where the values of assets and liabilities may change over time. Some items, such as marketable securities , are altered to match changes in their market values , but other items, such as fixed assets , do not change. The following are all limitations of financial statements.

Financial Statements 75

Financial Statements Auditing Accounting Accounting 75

Accounting Tools

MAY 10, 2024

There are several ways to calculate the market value of a company. We explore the different types of market valuation approaches in this article. In the latter case, it may be necessary to use an average stock price over an extended period of time as the basis for a valuation. Its market value is $30,000,000.

Financial Analysis 40

Financial Analysis 40

Accounting Tools

MAY 10, 2024

What is the Book Value Method? The book value method is a technique for recording the conversion of a bond into stock. In essence, the book value at which the bonds were recorded on the books of the issuer is shifted to the applicable equity account. Each share of the company's common stock has a $1 par value.

Accounting 40

Accounting Accounting 40

Accounting Tools

MAY 10, 2024

The asset turnover ratio compares the sales of a business to the book value of its assets. The measure is used to estimate the efficiency with which management uses assets to produce sales. A high turnover level indicates that a business uses a minimal amount of working capital and fixed assets in its daily operations.

Financial Statements 73

Financial Statements Accounts Receivable Accounts Receivable Account Receivables 73

Accounting Tools

FEBRUARY 12, 2024

These classifications are used to aggregate assets into different blocks on the balance sheet , so that one can discern the relative liquidity of the assets of an organization. First, it must have economic value. If it has no value, then it cannot be recorded in an organization’s accounting system.

Deposits 75

Deposits Accounts Receivable Accounts Receivable Account Receivables 75

Accounting Tools

DECEMBER 20, 2023

What is the Formula for the Present Value of an Annuity Due? The present value of an annuity due is used to derive the current value of a series of cash payments that are expected to be made on predetermined future dates and in predetermined amounts. The calculation is: P = ($100,000 [(1 - (1 / (1 +.05)8)) 05]) x (1+.05)

Financial Analysis 75

Financial Analysis Accounting Accounting 75

Accounting Tools

JULY 28, 2023

Related Courses Corporate Finance The Balance Sheet What is No Par Value Stock? No par value stock is shares that have been issued without a par value listed on the face of the stock certificate. Historically, par value used to be the price at which a company initially sold its shares.

Corporate Finance 76

Corporate Finance Accounting Accounting 76

Accounting Tools

DECEMBER 22, 2023

What is the Present Value Factor? The present value (PV) factor is used to derive the present value of a receipt of cash on a future date. For a greater degree of precision for values between those stated in such a table, use the formula shown above within an electronic spreadsheet.

Financial Analysis 75

Financial Analysis Budgeting 75

Accounting Tools

MAY 10, 2024

When to Recognize the Impairment of Long-Lived Assets An impairment loss is recognized on a long-lived asset if its carrying amount is not recoverable and exceeds its fair value. The amount of an impairment loss is the difference between an asset’s carrying amount and its fair value. Market price.

Auditing 40

Auditing Accounting Accounting 40

Accounting Tools

APRIL 25, 2024

What is the Book Value of Equity? Book value is the amount that investors would theoretically receive if all company liabilities were subtracted from all company assets ; this leaves a residual amount available for distribution to investors. The book value of equity concept is rarely used as a measurement within a business.

Computation 40

Computation Financial Statements Accounting Accounting 40

Accounting Tools

APRIL 15, 2024

Hedge accounting involves offsetting changes in the fair value of a financial instrument with changes in the fair value of a paired hedge. Hedges are used to reduce the risk of losses by taking on an offsetting position in relation to a financial instrument. Related Article Hedging Instrument

Accounting 40

Accounting Accounting 40

Accounting Tools

APRIL 9, 2024

A revaluation surplus is an equity account in which is stored any upward changes in the value of capital assets that exceed its prior book value. This surplus is only used when you are following the Revaluation Model to account for fixed assets. This approach is only allowed under International Financial Reporting Standards.

Financial Reporting 40

Financial Reporting Auditing Accounting Accounting 40

Accounting Tools

MAY 10, 2024

In the following sections, we note a number of recognition methods, how they work, and when they can be used. Completed Contract Method The completed contract method is used to recognize all of the revenue and profit associated with a project only after the project has been completed.

Collections 75

Collections Bookkeeping Billing Auditing 75

Accounting Tools

APRIL 25, 2024

The time value of money concept states that cash received today is more valuable than cash received at a later date. The interest income in this example represents the time value of money. The Time Value of Money for Expenditures The concept of the time value of money also works in reverse, for expenditures.

Financial Analysis 40

Financial Analysis Budgeting 40

Accounting Tools

APRIL 12, 2024

This amount is the acquisition cost of an asset, minus its estimated salvage value at the end of its useful life. Many organizations plan to use an asset and then scrap it. If so, they assume that there will be no salvage value, in which case the depreciation basis of an asset is the same as its cost.

Auditing 40

Auditing Tax Accounting Accounting 40

Accounting Tools

APRIL 17, 2024

A wasting asset is any asset that will decrease in value over time, and which has a specific useful life. In most cases, a decline in value is reflected in a reporting entity’s accounting records by an ongoing depreciation or depletion charge. Declining value. A wasting asset’s value will decline over time.

Computation 40

Computation Auditing Accounting Accounting 40

Accounting Tools

APRIL 12, 2024

A discount rate is the interest rate used to discount a stream of future cash flows to their present value. Depending upon the application, typical rates used as the discount rate are a firm's cost of capital or the current market rate. What is a Discount Rate in Finance?

Financial Analysis 40

Financial Analysis Budgeting 40

Accounting Tools

MAY 16, 2024

Tax Loss Carryforwards A tax loss can be carried forward into a future period, where it is used to offset a tax profit in that period. However, given the negative impact of the time value of money, a tax loss taken at some point in the future is less valuable to a taxpayer than a tax loss taken in the current period.

Tax 40

Tax Financial Statements Financial Reporting Accounting 40

Accounting Tools

MARCH 29, 2024

What is Face Value? Face value is the amount of a debt obligation that is stated as payable in a debt document. The face value does not include any of the interest or dividend payments that may later be paid over the term of the debt instrument. A typical bond face value is $1,000.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

MAY 16, 2024

The concept is used in standard costing to identify inefficiencies in a production process. The variance is then multiplied by the standard cost per hour to quantify the monetary value of the variance. A time variance is the difference between the standard hours and actual hours assigned to a job.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

MAY 4, 2024

What is Market Value per Share? Market value per share is the price at which a share of company stock can be acquired in the marketplace, such as on a stock exchange. Value investors closely follow this figure to determine when it makes sense to acquire shares at a sufficiently low price. Value volatility. Value amount.

Financial Statements 40

Financial Statements 40

Accounting Tools

JULY 13, 2023

Related Courses Excel Formulas and Functions Financial Analysis Introduction to Excel What is the Formula for the Future Value of an Annuity Due? Future value is the value of a sum of cash to be paid on a specific date in the future. 005 interest rate used in the last example is 1/12th of the full 6% annual interest rate.

Financial Analysis 75

Financial Analysis Accounting Accounting 75

Accounting Tools

OCTOBER 9, 2023

Audit sampling is the use of an audit procedure on a selection of the items within an account balance or class of transactions. The sampling method used should yield an equal probability that each unit in the sample could be selected. Random Sampling Under random sampling, a random number generator is used to make selections.

Auditing 75

Auditing Accounting Accounting 75

Billing Platform

NOVEMBER 15, 2023

While the terms are typically used interchangeably, there are a few subtle differences between usage-based billing and metered billing – the most significant being in how charges are calculated. Usage-based billing calculates charges based on how much of a product or service is used. per active user/per month when paid monthly.

Billing 98

Billing Collections Customer Service Invoicing 98

Accounting Tools

OCTOBER 23, 2023

Related Courses Cost Accounting Fundamentals What is the Relative Sales Value Method? The relative sales value method is a technique used to allocate joint costs based on the prices at which products will be sold. However, product margins may still vary, depending on the costs incurred by each product after the allocation point.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

OCTOBER 28, 2023

A lease is an arrangement under which a lessor agrees to allow a lessee to control the use of identified property, plant, and equipment for a stated period of time in exchange for one or more payments. The lessee has a purchase option to buy the leased asset, and is reasonably certain to use it. Right-of-use asset.

Accounting 75

Accounting Accounting Collections 75

Accounting Tools

MAY 9, 2024

The analysis is used to decide whether to proceed with a course of action or not. This approach is quite useful for clarifying the issues associated with a decision. If there are uncertainties about certain costs, then obtain a range of values, including the highest, lowest, and most likely costs for each cost item.

Financial Analysis 40

Financial Analysis Tax 40

Accounting Tools

NOVEMBER 5, 2023

Depreciation is used to gradually charge the book value of a fixed asset to expense. It is intended to approximately reflect the decline in value of an asset over time, due to wear and tear. It is also the easiest depreciation method to calculate, which makes it by far the most commonly-used depreciation method.

Record Keeping 75

Record Keeping Auditing Tax Accounting 75

Accounting Tools

JANUARY 20, 2024

What is Actuarial Present Value? Actuarial present value is the present value of payments that an entity expects to pay under a retirement benefit plan to its existing and past employees for services already rendered. This is part of the information used to charge benefits to expense in the accounting records.

Accounting 40

Accounting Accounting 40

Accounting Tools

OCTOBER 11, 2023

The following equity accounts are commonly used by corporations. Common Stock Common stock is the par value of the stock sold directly to investors. Par value tends to be quite small or nonexistent, so the balance in this account may be minimal. Preferred Stock Preferred stock is the par value of preferred stock.

Accounting 76

Accounting Accounting Bookkeeping Auditing 76

Accounting Tools

MAY 15, 2023

The amortization of intangibles involves the consistent reduction in the recorded value of an intangible asset over its projected life. Amortization refers to the write-off of an asset over its expected period of use ( useful life ). Intangible assets do not have physical substance.

Auditing 75

Auditing Accounting Accounting 75

Counto

APRIL 17, 2024

Resolution Mechanisms In instances of disagreement or non-compliance with the guidelines, employees are advised to use their company’s internal grievance handling mechanisms. Studies indicate job postings with such options draw considerably more applicants, showcasing the value potential employees place on flexibility.

Corporation Tax 98

Corporation Tax Payroll Bookkeeping Tax 98

Accounting Tools

JANUARY 18, 2024

What is Fair Market Value? Fair market value is the price that two parties are willing to pay for an asset or liability , if both parties are well-informed about the item in question, neither one is under pressure to buy or sell, and there is no time pressure to complete the deal.

Tax 40

Tax Accounting Accounting 40