Financial Accounting

Before we discuss the recognition principle and accounting treatment for sales under sale or return conditions. First lets have ourselves clear about what is meant by sale or return? Under sale or return, the goods...

Determining useful life of an intangible asset is not as easy as a tangible asset as most often intangible assets are of such nature that are unique and have no similar asset in the...

One of the reasons for charging depreciation against the historical cost of the asset, revalued amount or simply carrying value of asset is that asset's book value should be reduced to such residual value...

First of all we must be clear that goodwill is an intangible asset that entities can recognize in their financial statements but only such goodwill that is acquired in business combination. Internal goodwill or...

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...

If we look for the answer to the question that why goodwill is an asset, then there is no specific explanation given in two of the renowned accounting frameworks i.e. IFRSs and US GAAPs....

Before IFRS 3 was introduced, entities were allowed to amortize goodwill. However, after it was introduced back in 2004-2005, amortization of goodwill was strictly prohibited and entities were required to follow impairment regime. As...

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...

Depreciation basically signifies a steady decline in the value of asset. Generally it is studied in terms of the period of time that such decline in the value took place. Therefore, it is also described...

Journals, also known as Books of Prime Entry or Books of Original Entry are the first books of accounting in which transactions are recorded in a chronological order following certain rules and regulations of...