Accounting Articles

May 21, 2015

Out-of-balance items play an important role in the determination of the financial health of a company. Being harder to track, they can become hidden traps aimed to artificially improve the company’s financial position and performance. In this article we will describe the main types of out-of-balance transactions and provide approaches to accounting for the most common ones.

May 16, 2015

Should a reasonable investor be influenced by a 5% error in net income? Or would a 10% variation make a difference to the investor? The answer is related to the concept of materiality. In this accounting article we define materiality, list a few possible approaches to calculating materiality, and provide examples of the application of the materiality concept in accounting.

May 7, 2015

In the highly competitive market conditions enterprises are forced to increase their profitability. In this article we will review the impact of inventory on financial results of a company

April 22, 2015

In its regular course of business, a company needs to verify its balances and turnovers with banks, suppliers or other counterparties. The confirmation process is one of the ways to obtain such information. The article below focuses attention on the confirmation process peculiarities and contrasts accounting and audit confirmation procedures.

April 11, 2015

Financial statements and other financial information may include uncertainties. Impact of such uncertainties may be assessed using sensitivity analysis. In this article, we will describe the nature of sensitivity analysis and how it can be performed.

April 5, 2015

History of accounting standards has had several interactions of rules related to accounting for goodwill. Goodwill is a premium paid for a company over its assets and liabilities. There are situations, however, when a buyer pays less than what the assets and liabilities of the company are worth. This creates a bargain purchase.

March 26, 2015

Efficient and ethical corporate governance and internal audit function became increasingly important for investors after Enron scandal in 2001. This article focuses on the nature of internal audit, shows differences with external audit and provides overview of main audit assignments.

March 14, 2015

Under US GAAP, the cash flow statement can be prepared using either an indirect or a direct method. In this article, we will compare those two methods.

March 1, 2015

In this article, we’ll briefly describe how to account for stock warrants, which can be detached from a bond and exchanged for common stock – almost like a coupon

February 20, 2015

Valuation of fixed assets has always been a contradictory issue for standards setters. Accounting for fixed assets at historical costs decreases the likelihood of manipulation, while accounting for fixed assets at fair values provides more relevant information to users of financial statements. In this article we will review US GAAP rules about initial measurement and subsequent accounting for fixed assets, and compare them with the IFRS requirements.

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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.