SOX act or Sarbanes-Oxley Act was introduced in 2002 to encounter certain Corporate Scandals and improve the financial reporting standards of the companies. The name came from its inventors Paul Sarbanes and Michael Oxley. The SOX Act comprises of 11 sections or titles introduced by Security and Exchange Commission which describes the Corporate Responsibilities and […]Continue Reading... No Comments.
IFRS stands for International Financial Reporting Standards which is a globally accepted set of accounting standards presented by IASB (International Accounting Standard Board). Previously it was known as IAS – International Accounting Standards and it is now becoming the mostly used accounting standards by listed public companies across different countries in the world. Though it […]Continue Reading... No Comments.
Sl No. Category Accounting Standards Main Points 1 Accounting Basis IFRS Subsequent to initial recognition most of the assets and liabilities like property, plant, equipment, investment, derivatives etc are based on fair value and not on historical cost basis. Indian GAAP Indian GAAP emphasis on historical cost with an exception to fixed assets which […]Continue Reading... No Comments.
Accounting standards are accounting standards or rules which need to be followed while presenting financial statements so that readers can easily comprehend the statement, compare different company’s financial results and evaluate the performance compared to other companies. Every country has a statutory body responsible for establishing the accounting standard for their publicly listed and private […]Continue Reading... No Comments.
Here we are going to cover the detailed discussion of accounting for foreign subsidiaries and operations of multinational firms. The main issue is how to convert the income and amounts of a foreign subsidiary into the parent’s consolidated financial statements. For this case we have to consider two methods of accounting for foreign operations that […]Continue Reading... No Comments.
There are some other important ratios used to conduct the valuation of a company. These valuation ratios are mainly used to compare a company’s current valuation or market price with other companies operating into the same sector or industry or with the industry average. The main objective of this comparison is to find out whether […]Continue Reading... No Comments.
Company pays back some part of the profit to the equity shareholders in terms of the dividends. After paying the dividend, company keeps the remaining profit as retained earnings to invest in business or future expansion. Earnings per Share (EPS) denote the earnings or net income generated per common outstanding shares. This calculates the net […]Continue Reading... No Comments.
Activity ratios are related to the daily operations of a company which are used to analyze the efficiency of the company and the management to generate cash faster from the business operations. During its daily business operations the company Buy the raw materials and inventories from the suppliers and pay them cash for the same. […]Continue Reading... No Comments.
Solvency refers to the company’s ability to meet all of its obligations and to pay all of its liabilities when they are due to be paid. Solvency ratios are used to check the solvency condition of a company which mainly checks for the amount of debt taken and the cash spent on interest of the […]Continue Reading... 1 Comment.
Profitability ratios indicate the profit related performance of a company where it considers gross profit, net profit, operating profit etc. to calculate the profitability ratios. The profit margin denotes the percentage of profit generated for each amount of sales volume. It means how much the company is earning in cash from each sales volume and […]Continue Reading... No Comments.