What is the difference between a Fair presentation framework and a Compliance framework?
Financial statements are prepared to fulfill information needs of its users. In order to cater the needs at best a certain financial reporting framework is used considering the jurisdiction in which the entity and/or its users exist. For example two of the popular financial reporting framework are IFRSs and US GAAPs. However, talking about the […]
What is meant by deviation from controls?
Simply put; an instance or activity that did not occur as per expectations is considered as deviation. For an activity it is not necessary that it must occur as per expectations but also non-occurrence can be considered as deviation. In short, any thing that given rise to conflict between expectation and what actually happened is […]
What is Income approach to fixed asset revaluation?
After initial recognition at cost if the carrying value of an item (of property, plant and equipment) is significantly different from the value measured on fair value basis then revaluation of asset is required. The reason is if asset is still carried at old value financial statements might give distorted view of assets. Assets are […]
What does favourable and unfavourable variance mean?
Variance analysis is a known quantitative technique that involves identification and evaluation of causes behind differences between actual costs/revenues and standard (or expected) revenues/costs. Variances are analysed in terms of being favourable or unfavourable for business and are monetized as a difference given a financial value it is more easier for the relevant authorities to […]
What is Variance analysis?
Any activity humans perform they do it for betterment and get the benefit in one or the other. In business environment basic motive is profit maximization and this is ensured in every decision they take. To aid their decision making process humans are using the technique of comparison since early ages. Comparison helps human decide […]
Differentiate between Goods Received Note (GRN) and Goods Despatch Note (GDN)?
In order to control the activities of the business and have operations running effectively management is responsible to have controls in place. Without controls accountantability will not be possible. One of the ways by which controls can be implemented is by using control documents (sometimes known as source documents as some are used to initiate […]
What is meant by Cost object?
Cost object is anything in relation to which user of cost information wants to measure cost. It can be a product or collection of products or even a unit of product. It can be an activity. It can be a cost center i.e. a department responsible to incur cost. It can even be an instance […]
What is Cost accounting?
Cost accounting is a process of monetizing outflow of resources or loss of benefits in relation to certain aspect of the business for which user demands an information which is mostly used in decision making process. It is in the nature of humans to seek benefit in every activity they pursue. Due to the same […]
What is meant by Cost?
Cost is the monetary amount of resources or the consideration for using the resource invested or consumed or used up. In its most simplistic form cost is monetary measurement of resource outflow due to any reason. As cost is an information, user of information may require this information to be generated or processed as per […]
What is Continuous stocktaking?
Stocktaking is simply physical checking or counting of inventory held by the entity and by continuous stocktaking it means inventory counts that are undertaken on regular basis. Continuous stocktaking method is used over periodic stock counts to increase accuracy especially for the goods which are high value or have high turnover i.e. fast moving inventory/goods and […]
