Accounting Articles

January 29, 2015

A conversion feature can add a lot of value for potential bondholders because the investor could take advantage of future company growth. In this article, we’ll discuss the basics of recording an issuance of convertible bonds and transferring the bond liability to equity accounts when the bonds are converted.

January 22, 2015

Normal business relationships among a parent and subsidiaries cause intercompany transactions that need to be recognized in the separate financial statements of these entities. When the time comes for periodic reporting, the parties engage in reconciling their accounts. In this article we will review the reasons why intercompany reconciliations are needed and look at reconciliation procedures.

January 17, 2015

Most costs capitalized to manufactured or constructed assets are easy to differentiate from costs that should be immediately expensed. In this article, however, we’ll cover a more obscure cost that should be allocated to constructed fixed assets – interest on the debt used to finance the construction project.

January 11, 2015

In this article, we’ll cover the basics of internal controls. Internal controls represent a concept that is absolutely fundamental to any well-managed business. They are also one of the foundations of financial statement audits.

December 29, 2014

You have probably heard about economies of scale, but may not be sure how they work. In this article, we will discuss when economies of scale take place.

December 18, 2014

Warrants can be used as sweeteners by companies issuing debt securities or preferred stock to entice potential creditors/investors. This article covers the basics of warrants.

December 11, 2014

The amount of intangible assets in financial statements within software, pharmaceutical, sport and other industries has grown significantly in recent years making capitalization and valuation of intangible assets a topical issue. The article below deals with recognition, measurement and valuation of intangible assets.

December 3, 2014

Companies pay taxes that are determined by specific country laws and regulations. However, taxable profits are rarely the same as financial accounting profits which gives rise to deferred taxes in financial statements. This article describes the basic rules of determining deferred tax assets and liabilities and their presentation in the cash flow statement.

November 26, 2014

Debt is a common financing tool for most corporations. In this article, we’ll discuss what happens when a company has trouble paying its legal bond obligations.

November 18, 2014

A number of different circumstances could turn a positive retained earnings balance into a retained earnings deficit. When a deficit becomes too large, the company can utilize an accounting trick known as quasi-reorganization to get back on the right track.

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Accounting Articles
Accounting Articles include guides and answers. Accounting guides explain application of accounting principles in practice. Great assistance if you are looking for real-life accounting situations. Accounting answers explain particular accounting topics suggested by our website users. Great to find quick answers for specific topics.