Financial Accounting

Push-down accounting is applied in business combinations. The accounts books of an acquirer reflect the changes in the books of the acquiree. The target entity reflects the new fair value figures in its financial statement because of the new business combination that emerged after the transaction. Push-down accounting is regulated under the GAAP rules in […]

Leveraged buyouts refer to the takeovers using debt financing. LBOs often happen outside the control of the acquiree firm. The acquirer may take over the target company for several reasons. The accounting basis for leveraged buyouts is set to analyze the new entity’s control and the transaction’s monetary value. If the takeover meets certain conditions,

Dividends refer to payments that are made by a company to its shareholders from its accumulated distributable earnings. The dividends will either be in cash or in some kind of consideration (i-e; stocks, shares of a listed company, etc). When a corporation issues a dividend of its common stock to its common shareholders without any

Contributed capital of a company is made up of two items; stocks and additional paid-in capital. The stocks section refers to the issued common stock usually. Thus, the term additional paid-in capital is one part of the total contributed capital. Contributed capital is not borrowed money from investors. Once invested, the company does not need

Additional paid-in capital (APIC) or capital surplus is the money investors pay above the par value of shares. The premium paid above the face values of the newly issued shares is called the share premium or additional paid-in capital. It is received by a company when it issues common or preferred shares. It can only

Contributed capital is the amount of money shareholders have invested in the company in exchange for ownership rights. It is also called paid-in capital or shares capital. It is recorded on the balance sheet as the first line item under the owner’s equity section. Common stocks issued and premiums paid for these stocks combined to

Whenever a person buys a product, there are a lot of thoughts going on in his mind; for instance product design, durability, specifications, etc. However, the biggest concerns of a consumer while buying a product are its durability, security, and longevity. The warranty gives the consumer an aspect of security. A vendor or a manufacturing

A lease is an agreement between two parties for using an asset. The party that owns the asset is the lessor, while the other party is the lessee. The lessee uses the leased asset and pays a regular fee to the lessor. Before the transaction, both parties enter into an agreement that defines each party’s

What are Equity Shares? Equity shares, also known as ordinary shares, are stocks that shareholders can buy to receive ownership of a company. The proportion of their ownership depends on the fractional number of shares they hold of the total shares issued by the company. These shares also usually come with voting rights, which allows