Net worth Yes, net worth includes liquid assets. It is a measure of an individual’s or entity’s overall financial position and represents the difference between their total assets and total liabilities. It provides an indication of their wealth or financial value. Assets can be categorized into two main types: liquid assets and non-liquid… Read More »
Importance Of Asset Valuation Here are some several reasons of Importance Of Asset Valuation: 1. Financial Reporting: Accurate asset valuation is essential for the preparation of financial statements. Assets are a significant component of a company’s financial position, and their values directly impact financial ratios, such as asset turnover, return on assets, and debt-to-equity… 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 »
Asset Depreciation: Can Assets Be Depreciated? When businesses or individuals purchase assets like machinery, equipment, or buildings, these assets typically wear down or lose value over time. This natural decline in value is recognized as depreciation. But, can all assets be depreciated? Let’s break it down. What is Depreciation? Depreciation is the accounting process of… Read More »
Are derivatives assets or liabilities Are derivatives assets or liabilities, Derivatives can be both assets and liabilities, depending on their specific characteristics and the context in which they are hold. Derivatives are financial instruments that derive their value from an underlying asset, index, or reference rate. Derivatives as assets: In some situations, derivatives can… Read More »
Capital Gains and Capital Asset Capital Gains refers to the profit made by an individual or an entity when they sell a capital asset, such as property, stocks, or mutual funds, at a higher price than its purchase price. A capital asset is any asset that an individual or an entity owns for personal or… 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 »
Estimation and Valuation Estimation and valuation are two terms used in accounting and finance to assess the worth or value of an asset or liability. Estimations is the process of making an educated guess or calculation of the value of an asset or liability. It involves using historical data, market trends, and other relevant information… Read More »
