Depreciation on Assets Depreciation on Assets in general, tangible assets can be depreciated. Tangible assets are physical assets that have a determinable useful life, meaning they are expected to provide economic benefits over a specific period. Common examples of tangible assets that can be depreciated include: 1.Buildings: This includes commercial buildings, residential properties, warehouses,… Read More »
User Intent Many business owners, investors, and financial analysts seek reliable methods for asset valuation of a company to assess its worth. Accurate valuation helps in decision-making, mergers, acquisitions, tax calculations, and financial reporting. This guide provides a detailed step-by-step process for asset valuation, ensuring clarity and accuracy. Introduction Determining the value… Read More »
Annual Impairment Testing of Assets Under accounting standards such as the International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP), certain assets require to test for impairment annually. Impairment testing involves assessing whether the carrying value of an asset exceeds its recoverable amount, which is the higher of its fair value less costs… Read More »
How do I calculate the interest on GST liability The interest on GST liability is calculated at a specific rate on the amount of tax liability that is overdue or unpaid for a particular period. The interest rate is currently set at 18% per annum and is calculated on a monthly basis. To calculate the… Read More »
Accounting treatment of an asset When an asset has been fully depreciated but is still in use, it should be recorded on the balance sheet at its net book value, which is the original cost of the asset minus the accumulated depreciation. The accumulated depreciation account will continue to increase as depreciation is charged each… Read More »
Current assets to proprietor’s fund ratio The current assets to proprietor’s fund ratio is a financial metric used to assess the liquidity and financial health of a business. It measures the relationship between the current assets, which are assets that expect to convert into cash within one year, and the proprietor’s fund, which represents the… Read More »
Intangible Assets Yes, assets can be intangible. In accounting and finance, assets can categorize into two main types: tangible assets and intangible assets. Tangible assets refer to physical assets that possess a physical form and can be perceived through touch or sight. Examples of tangible assets include buildings, machinery, vehicles, inventory, and land. On the… Read More »
Accounts Receivable Current Asset Accounts Receivable Current Asset, Yes, it is generally classify as a current asset on a company’s balance sheet. This is because account receivable represent amounts owed to the company by its customers for goods or services that have already been deliver or provide, but for which payment has not yet… Read More »
Capital Exp. Vs. Working Capital: Capital expenditure It refers to the money spent on long-term assets that are expected to provide benefits for more than one accounting period. These assets include property, plant, and equipment (PP&E), intangible assets, and investments. Capital expenditure is recorded on the balance sheet as an asset, and the cost… Read More »
Inventory Asset Classification Inventories is typically categorized as a current asset in the balance sheet of a business. Inventory Asset Classification is because inventory expect to sell or consume within the normal operating cycle of the business, which is usually within one year. However, if the inventory is held for a longer period of time,… Read More »
