What is the difference between Income Statement and Statement of...
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...
View ArticleWhy 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...
View ArticleWhat 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...
View ArticleWhat 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...
View ArticleWhat is the difference between Authorised capital, Issued capital, Subscribed...
Authorized capital: The amount of capital with which a company is registered with the registrar of companies (body responsible for registration of companies). It is the maximum amount of capital which...
View ArticleWhat are the fundamental principles for the preparation and presentation of...
Although the accounting treatments and provisions regarding presentations of different important transactions in the financial statements is dealt separate accounting standards. However, in the absence...
View ArticleWhat 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....
View ArticleWhat is the difference between Faithful representation and Fair presentation?
IASB framework provides conceptual guidance regarding preparation and presentation of financial statements whereas IAS 1 sets out the principles and rules for preparation and presentation of financial...
View ArticleCan we capitalize Tax amounts?
According to IAS 16 the purchase price of the asset includes the amount of non-refundable taxes i.e. such taxes which cannot be claimed back are capitalized and are included in the cost of the asset at...
View ArticleWhat are the limitations of Balance Sheet or Statement of Financial Position?
Statement of financial position or Balance sheet is the essential part of the complete set of financial statements. It is also one of the most sort after source of information for the users of...
View ArticleWhat 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...
View ArticleWhat is the difference between Purchase ledger and Purchase account?
Quite a basic question in fact. A lot of students realize about these concepts as soon as they start studying Auditing especially when they have to apply different audit procedures where these basic...
View ArticleHow Goodwill is an asset?
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. Although, the...
View ArticleWhy impairment of goodwill is not reversed?
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...
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