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The accounting treatment for goodwill remains controversial within both the accounting and financial industries because it is fundamentally a workaround employed by accountants to compensate for the fact that businesses when purchased are valued based on estimates of future cash flows and prices negotiated by the buyer and seller, and not on ...
The accounting treatment of the situation when the employer sells off part or the whole of its operation (a “settlement”) needs to be specified. Similarly, the accounting treatment of the situation where the employer reduces its complement of staff or closes the plan (a “curtailment”) needs to be specified.
IFRS 9 began as a joint project between IASB and the Financial Accounting Standards Board (FASB), which promulgates accounting standards in the United States. The boards published a joint discussion paper in March 2008 proposing an eventual goal of reporting all financial instruments at fair value, with all changes in fair value reported in net income (FASB) or profit and loss (IASB). [1]
Accounting, also known as accountancy, is the process of recording and processing information about economic entities, such as businesses and corporations. [1] [2] Accounting measures the results of an organization's economic activities and conveys this information to a variety of stakeholders, including investors, creditors, management, and regulators. [3]
A write-down is an accounting treatment that recognizes the reduced value of an impaired asset. The value of an asset may change due to fundamental changes in technology or markets. One example is when one company purchases another and pays more than the net fair value of its assets and liabilities.
In terms of its accounting treatment, an expense is recorded immediately and impacts directly the income statement of the company, reducing its net profit. In contrast, a capital expenditure is capitalized, recorded as an asset and depreciated over time.
In accounting, minority interest (or non-controlling interest) is the portion of a subsidiary corporation's stock that is not owned by the parent corporation.The magnitude of the minority interest in the subsidiary company is generally less than 50% of outstanding shares, or the corporation would generally cease to be a subsidiary of the parent.
Available for sale (AFS) is an accounting term used to classify financial assets. AFS is one of the three general classifications, along with held for trading and held to maturity, under U.S. Generally Accepted Accounting Principles (US GAAP), specifically FAS 115. The IFRS also includes a fourth classification: loans and receivables.