Second, amortization can also refer to the practice of spreading outcapital expensesrelated to intangible assets over a specific duration—usually over the asset’suseful life—for accounting and tax purposes. Amortization of Loans Amortization can refer to the process of paying off debt over time ...
Goodwillis synonymous with reputation and in business that can be a huge asset for a company. The accounting term goodwill gives a way for companies to value their reputation in a monetary form. Though it’s important and can carry significant value, goodwill needs to be compared to other ...
Price-to-book (P/B) ratioas a valuation multiple is useful when comparing similar companies within the same industry that follow a uniform accounting method for asset valuation. It can offer a view of how the market values a particular company's stock and whether that value is comparable to ...
Amortization of Intangible AssetsCapitalized Software CostsGoodwill AccountingGoodwill Amortization Inventory Costing Methods (FIFO vs. LIFO) FIFO vs. LIFOAverage Cost MethodWork in Progress (WIP) Accrual Accounting Terms Contra AccountContra Liability AccountAllowance for Doubtful AccountsBad DebtRestric...
Accounting profit must be adjusted for accrued items such as deferred taxes, bad debts expense, amortization of goodwill, etc. to arrive at the economic profit. The actual adjustments depend on the accounting policies used in arriving at the accounting profit. For example, interest expense on ...
Salvage Value is the residual value of a fixed asset at the end of its useful life assumption, after accounting for total depreciation.
However, losses on goodwill are not reversible. For other assets, the loss can be reversed if the condition improves. #2: US GAAP US GAAP has accounting codes like ASC 350 and ASC 360 that cover impairment of assets. US GAAP is a little complex, unlike IAS 36, which is very simple....
A company might keep some of its assets in another form, where it can’t easily cash out. For example, it might store gold in vaults rather than sell it and deposit the money in an account. Accounting standards requirecompanies to reportvaluation of these kinds of assets. This lets investo...
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