A valuation allowance is an accounting procedure used to adjust the carrying value of a deferred tax asset. Deferred tax assets arise when a company pays more taxes in advance than it owes in the current period, often due to temporary differences between the accounting and tax treatment of reve...
of traditional accounting principles, modern financial reporting prompted the authors of this paper to address the importance of the application of traditional accounting principles, especially the principle of prudence (conservatism), and the concept of fair value for the acc...
Neutrality requires an unbiased depiction of economics and involves exercise of prudence such that neither current period earnings are overstated or understated nor those of future periods. Free from error means that the underlying process used to prepare the financial information being presented. It ...
When it comes to accounting for such derivatives, it is a complex task. However, the underlying concept is that one must show them at a fair value. The prudence and guidelines also suggest that if an embedded derivate can trade in the normal course as a usual derivative, then the host co...
Recoverability of some receivables may be doubtful although not definitely irrecoverable. Such receivables are known as doubtful debts. Prudence requires that an allowance be created to recognize the potential loss arising from the possibility of incurring bad debts. ...
Related Topics Qualitative Characteristics of Financial Information Accounting Principles Consistency Concept Materiality Concept Relevance and Faithful Representation Comparability Principle Prudence ConceptAll Chapters in Accounting Current Chapter Accounting Principles Qualitative Characteristics of Financial Information...
Hence, it is important to consider this expected loss at the time of calculating the profit and loss for the period. So, for this purpose, the shopkeeper creates provisions for doubtful debts. Further, we do so to follow thePrinciple of Prudence. ...
The financial statements prepared for the period ending 31st March 2009 have discrepancies of overstatement of income and understatement of liabilities. This violates the international accounting standards of prudence, faithful representation and reliability (International Accounting Standards Body, 2008, pp. ...
Financial prudence is the order of the day in Saudi banks, which explains why they Saudi banks did relatively well despite the global financial downturn. Central banks around the Middle Eastern needed to intervene because of the 2008-2009 credit crunch. However, this was not the case for Saudi...
The following four cardinal virtues would be my guiding shield in my profession. Fortitude, temperance, prudence, and justice are virtues that would enable me to remain steadfast and focused on achieving my set goals. In the time of tribulations and turbulences in the tourism market, the four ...