What is meant by Economic benefits and how they flow to the entity?
It is easy to understand that entities around the world hold different sets of machinery, plant, equipment, building, land and other kinds of assets through which it offers products or services to its customers and...
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 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...
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 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...
What is Special purpose framework of preparing Financial Statements?
Generally financial statements that are made available to public are prepared using such accounting and reporting framework that caters the general decision making needs of general users and thus called general purpose financial reporting...
What is the difference between Cash basis and Accrual basis accounting and which one...
Accrual basis of accounting is one of the underlying assumption for preparing financial statements under International Accounting Standards. IASB Framework clearly demanded the financial statements to be prepared on accrual basis instead of cash basis...
What is Source document?
In the business world buyers and sellers interact to exchange goods and services and other transactions like payment. A diligent accountant keeps the record of all such important transactions about which users must be...
Is depreciation expense a fixed cost or a variable cost?
Let's revisit the terms Fixed cost and Variable cost and then we will discuss where depreciation cost/expense really fits.
Fixed costs are such costs that do not change with the change in activity level (e.g....
What is meant by Owner-occupied property in international accounting standards?
Owner-occupied property are such assets that are held by the entity for use in production or provision of services in the ordinary course of business. This is exactly those assets that are discussed under...