What is the difference between Complex asset and Cash generating unit?

To keep things simple, complex asset (or also known as separate component asset) and cash generating unit (CGU) is more of a concept rather than kinds of assets. These concepts are there just to...

How a liability paid in kind or by issuing shares is disclosed in statement...

Most of the time entities pay out their liabilities, whether short term or long term, in cash. And by cash it means either in hard cash or by issuing cheque or using cash equivalents. Sometime...

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...

What is ‘Declining balance to Straight line crossover’ method of depreciation?

Majority of the students studying accounting, either at initial stages or experienced in accountancy academics, are familiar with two of the most renowned depreciation methods used by entities to calculate depreciation expense for the...

What is the difference between Product cost and Period cost?

Product costs or Inventoriable costs are all such costs that form part of the inventory.These are basically such costs that relates directly to the products and are incurred to produce such products and...

How fixed assets are revalued if fair value cannot be determined using market value?

IAS 16 Property, Plant and Equipment (IAS 16) recognizes the fact that fair value of every asset may not be determined using market value basis. Although it is recommended and hardly the case where...

Why Financial Statements are prepared on Accrual basis?

Financial Statements assist internal and external users by providing them financial information which they in making economic decisions. As their decisions are based on financial information underlying financial statements therefore, decision making...

What is meant by ‘line item’ in accounting standards?

Term line item basically refers to such piece of information which has its own weight and should be presented on a separate line on any document. In context of International Accounting Standards (IASs) and International...

What is the difference between financial report and financial statement?

Financial report means any report about monitory matters. In other words a financial report is about the transactions that have financial effects. To run a business financial reports play important role as relevant financial...

What is Common Size Income Statement?

Common size income statement is an income statement in which each item is reported as a percentage of revenue (also known as turnover or sales).This technique i.e. to express quantities as a percentage of...