What is Running balance method of maintaining ledgers and journals?
Usually students are taught to maintain ledgers using period basis balancing or period balancing however there is another method which is more known to professional accountants to maintain certain journals and ledgers which is...
How can we change the Depreciation method?
Most of the non-current assets held by the entities require depreciation because of use devaluation as a result of use of the asset in business operations or other factors.
Many different depreciation methods can be...
What is Depreciated replacement cost?
Depreciated replacement cost is an optimised form of replacement cost method to make the estimate more realistic by adding the aspect of depreciation to a simple replacement cost concept for valuation purposes.
Replacement cost is...
How to record the disposal of revalued non-current asset?
Revalued non-current asset is the one that has undergone revaluation and now that asset is now measured on revaluation basis instead of historical cost basis. To learn more about revaluation model consult our IAS...
What are the Elements of Financial Statements?
The main purpose of financial statements is to provide financial information to the users to assist them in their economic decisions. The financial statements basically present the financial information in such form that it...
What is Contingent rent in leases?
IASB's International Accounting Standard IAS 17 defines contingent rent as follows:
Contingent rent is that portion of the lease payments that is not fixed in amount but is based on the future amount of a...
Why closing inventory appears on the credit side of Trading account?
Closing stock or as it is also named as closing inventory is definitely an asset. But trading account is not the same as Inventory account. Inventory, being an asset, should have a debit balance...
Is there any case in which Liability increases and decreases as well?
In one single transaction there are absolutely NO chances that liability increases and also decreases at the same time. And even for the sake of argument we consider that yes it will increase and...
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 the difference between Exceptional item and Extraordinary item?
So far International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) have not defined such terminologies. However, apparently these terms seem to have different treatments according to accounting standards especially IAS 1 in...