Liquidity Ratios

Liquidity Ratios The term liquidity refers to that ability of the firm to meet its obligations as and when due. The current liability of the company meets by the realising amount from current assets. The current assets may be in the form of liquid or near to liquid. The sufficient …

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Ratio Analysis

Introduction Ratio analysis is one of the most useful techniques of analysis or interpretation of the financial statement. The term ratio may be defined as an arithmetical expression of the relationship of one number to another number.   In other words, we can say that ratio is an expression of the …

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Methods of Valuation of Goodwill

The following are the methods of valuation of goodwill:- Average maintainable profits method Super profit method Capitalisation method Annuity method Hidden method Average Maintainable Profit Method: – Under this method, average profit means average profits of actual profits of past three to five years depending upon the nature of business. The average …

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Operating and Financing Lease

Lease The term lease defined as a contact between the owner of an asset that is called lessor or the user of the assets that is called lessee.  The lessor of the contract gives the right to lessee to use the assets or equipment for agreed period of time. The …

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Systematic Risk

The term risk refers to derivation from an expected outcome. The risk in holding an investment is generally associated with the rate of return. There are two types’ risks those affect the rate of return of the securities. Systematic Risk Total Risk= Systematic risk + unsystematic risk. Systematic risk is …

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Equity Valuation Methods

The term equity valuation refers to the process of determining the fair market value of equity securities. The equity valuation method divided into three parts:- Balance sheet method Dividend discount cash flow method Relative value method Balance sheet Method: – It is a method or a technique to determining the …

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Functions of IASB

functions of iasb - fundamentalsofaccounting.org

Introduction International Accounting Standard Board (IASB) is an independent, private-sector body (previously known as IASC), based in London. IASB is committed to develop and approve a single set of global accounting standards (that is known as International Financial Reporting Standards), which require transparent and comparable information in general purpose of …

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Functions of FASB

Introduction FASB stands for Financial Accounting Standard Board. It was established by Security and Exchange Act in 1973, as an independent, private sector, not-for-profit organization that establishes accounting principles and accounting procedures.  The body of this principal and procedures called General Accounting-Accepted Principal (GAAP). FASB regulated by Security and Exchange …

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