Why residual value (salvage value) is not allocated to the useful life of a...
Scrap value or salvage value or residual value is the value which we expect to receive by selling an asset at the end of its useful life. So basically it is the monetary value...
Is cash a tangible asset or an intangible asset?
In order to check the status of an asset whether it relates to a particular class or not, it is always a good idea that we go for the definitions provided in the relevant...
Are prepaid expenses financial asset?
In order to confirm whether a particular asset is a financial asset or not, we will have to look at the definition of financial asset
International Accounting Standard IAS 32 defines the term financial asset...
What is HIFO?
HIFO is an acronym for Highest in, First out.
This inventory valuation method assumes that inventory with highest bought in value i.e. highest purchase price in the stock will be consumed first or in other...
What are the important Qualitative characteristics of Financial Statements?
As we understand that different users require financial information for assistance in their economic decisions. Entities publish financial statements so that users can get their information needs fulfilled.
The dependence of users' economic...
What is the objective of Financial Statements?
The basic objective of any financial statement is to fulfill information needs of the intended users. However, there are different kinds of financial statements for different purposes.
Broadly we can divide the financial statements in...
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 the difference between Income Statement and Statement of Comprehensive Income?
Income Statement and Statement of Comprehensive are differentiated because IAS 1 gives two options to present the items of incomes and expenses recognized during the period.
IAS 1 para 81 allows that all the items...
What is the difference between Negative assurance, Positive assurance, Negative opinion and Negative report?
Difference between Negative assurance and Positive assurance
Many students get confuse in these things and mostly it is because books usually use such terminologies which prevail in the business world which are most of the...
What is Inventory?
Inventory is simply such asset that business has bought and holds with an intention to be sold in the normal course of the business i.e. it is the business of the entity to buy...