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...

How cost of tangible fixed asset is determined?

Fixed assets or non-current assets can either be tangible or intangible and separate standards provide guidance on both. For most of the tangible fixed assets IAS 16 is considered whereas for most of the...

What is a non-cash expense?

Non-cash expenses are such expenses that do not involve real cash outlay or against which no real cash outflow has taken place at least in the period in which such expense has been reported....

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 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...

What is Grouping and Marshalling in financial statements?

While preparing financial statements, especially Statement of Financial Position (SoFP) also, known as balance sheet, two presentation concepts are applied which are termed as Grouping and Marshalling. Grouping means presenting similar items together as...

What is Journal and how many types of journals are in accounting?

These are the first formal books in which information regarding transaction is recorded . For the same reason they are also named as books of prime entry or books of original entry or ...

What is meant by Carriage inwards and its accounting treatment?

Carriage inwards, transportation inwards, transport inwards, freight inwards or shipping cost are the cost borne by the buyer of the goods for moving the goods from supplier's place to his own place (usually raw...

Why don’t we revalue current assets like non-current assets?

Concept of revaluation of assets is usually associated with non-current assets only. The main reason why the term 'revaluation' is just attached with non-current asset might be that International Accounting Standard (IAS) 16 use...

What is the purpose of Statement of changes in equity?

Many students find it confusing that if we already have two financial statements, one covering the financial position of the business and the other telling about the financial performance then why do we need...