What is revenue recognition and accounting treatment for goods sold or sent on sale...

Before we discuss the recognition principle and accounting treatment for sales under sale or return conditions. First lets have ourselves clear about what is meant by sale or return? Under sale or return, the goods...

What is meant by Economic benefits and how they flow to the entity?

It is easy to understand that entities around the world hold different sets of machinery, plant, equipment, building, land and other kinds of assets through which it offers products or services to its customers and...

How Goodwill is an asset?

If we look for the answer to the question that why goodwill is an asset, then there is no specific explanation given in two of the renowned accounting frameworks i.e. IFRSs and US GAAPs....

What is meant by Depreciation?

Depreciation simply means a steady decrease in the value of asset. Often it is studied in relation to the time period over which such decrease in the value has occurred. Therefore, often it is also...

What are Real accounts and what is the related ledger and the accounting rule?

There are many different ways in which accounts can be classified and types of accounts be discussed. One of the ways is to divide all of the accounts in personal and impersonal accounts. Real accounts...

Can we capitalize material relocation expenses incurred on non-current asset?

First of all we must be clear about subsequent expenditures, criteria for capitalizing subsequent expenditures in carrying amount of non-current/fixed assets and relocation costs or expenses. Subsequent expenditures refers to such costs which are...

What is accelerated depreciation method?

i-ask! | Have a question? Ask Tutor!   What is meant by accelerated depreciation method? When such method is used and how many types are there for this method? And what is the position of accounting...

How to know that a lease is a Finance lease or Operating lease?

The core principle to distinguish or differentiate finance lease agreement from operating lease agreement is that if substantial risks and rewards incidental to the ownership of an asset are transferred under a lease agreement...

What is the difference between Finance lease and Operating lease?

According to IAS 17 two types of leases are identified namely Finance lease and Operating lease. The distinction between the two primarily resulted from the implications of one of the important accounting concept Substance...

What is the difference between Faithful representation and Fair presentation?

IASB framework provides conceptual guidance regarding preparation and presentation of financial statements whereas IAS 1 sets out the principles and rules for preparation and presentation of financial statements. So the difference between these two...