Revenue Recognition, The Five Steps Approach under IFRS 15

Introduction One of the few recent International Financial Reporting Standards (IFRSs) issued by International Accounting Standards Board (IASB) that happened to supersede the old standard(s) and have caught attention of Accountants in practice and industry across the globe is the standard that discusses the matter of Revenue Recognition in detail – IFRS 15 Revenue from …

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What is Activity Based Costing (ABC)?

Introduction Every product we use or see has a price tag (cost + margin), that pricing decision can be the difference between a product being successful or flop. In traditional costing the variable costs are spread across the products line uniformly irrespective of the product consuming that cost or not. However different products require different …

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Inventory Control,The Ultimate Guide

Introduction Behind every successful business there are great control procedures and systems that ensure the success of the business. Among these systems, the most important system is a good inventory control system for businesses with physical stock. Inventory or stock control helps businesses ensure that stock is always available for sale and use. It ensures …

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Advantages and Disadvantages of Perpetual Inventory and Periodic Inventory System

Introduction In previous articles, we have covered both perpetual inventory system and periodic inventory system. In this article we will cover the advantages and disadvantages of perpetual and periodic inventory system. Typically, in a manufacturing business or a business with a physical stock, proper inventory management is necessary. Businesses need to keep track of their …

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What is Depreciation?

When a business purchases a new fixed asset, the business cannot expense out all of the cost of the asset in the year of purchase. This is due to the matching concept which states that expenses should be matched to the year in which revenues are earned from them. Fixed assets help a business generate …

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Four Methods of Inventory Costing

In the previous articles, we have talked about inventory as well as methods in valuing inventory. In this article, we will talk about the inventory costing. So what are the costing methods of inventory? Inventory costing is very crucial; especially for merchandising company as we need to present in the financial statements both in statement …

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