Introduction How to account for amortization of prepaid expenses is the key for accountants not just for a big company but also for a small business entity. Prepaid expenses commonly happen when an entity adopts the accrual basis accounting. When an entity makes an advance payment; for example, for rental for a period of one […]
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Accounting for accrued expenses is very important, especially when an entity adopts accrual basis accounting. In day-to-day operations, we often encounter such key accounting terms. So what are accrued expenses? What is the proper accounting for accrued expenses? What is Accrued Expense? Accounting for accrued expenses properly is the key task for accountants. Before jumping
Accounting for Accrued Expenses? Practical Examples Read More »
Introduction All businesses prepare budgets; they provide the management useful tools for planning, forecasting, controls, and performance evaluations. The traditional approach towards budgeting is to analyze the past year’s budgets, make adjustments, and prepare the next year’s budgets. The revolutions of new business trends demand robust and flexible approaches. Stakeholders are demanding for extra scrutiny
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Introduction In management accounting, budgeting is a vital part of planning, performance management, and control measures. “A budget is a quantitative plan prepared for a specific time period. It is normally prepared in financial terms and for a time period of one year”. In different types of budgeting techniques, Activity Based Budgeting is defined as:
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Introduction Accounting for goodwill is normally applicable for Group Company where the parent company has bought or acquired its subsidiaries’ shares. There is specific formula for goodwill calculation. Before understanding how to account for goodwill and the subsequent impairment recognition, let’s understand the key definition of goodwill first. So what is Goodwill? Definition We commonly
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Introduction Accounting for borrowing costs are crucial; especially when an entity has a large project to build and need source of fund from bank. When we borrow any fund from bank, the bank usually charges the interest which we commonly call it as finance costs as well as other charges associated with such borrowing. We
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Introduction Every successful project requires detailed attention to every step involved in it. A good management team will start with a pre-plan. Strategic planning requires clear identifications of objectives and goals, in line with the vision and mission statements of the company. One successful approach towards project planning and control is a seven step cycle.
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Introduction Budgeting is a key performance management tool; it sets benchmarks in the operations. It provides valuable analysis for target sets and variance in the results. Different budgeting techniques serve different purposes, for instance; Beyond Budgeting vs Traditional Budgeting. The budgeting process for a company sets an environment of quality management starting from planning, communication,
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Introduction Budgeting and forecasting are two important tools for management in performance planning and measurement. Both of these techniques work similarly, as they observe the historic data, apply changes, and forecast a plan of action for future activities for the management. Uncertainty in macroeconomics or volatility in microeconomics both call for a robust approach, which
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Introduction All organizations work in hierarchical set up, approached differently according to each one’s needs. The top-down and bottom-up approach in budgeting are two approaches of decision making in an organization. These approaches can apply to any planning and decision making process e.g. forecasting, budgeting, and financial decision making. The choice between these two approaches
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