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Cost–benefit analysis (CBA), sometimes also called benefit–cost analysis, is a systematic approach to estimating the strengths and weaknesses of alternatives.It is used to determine options which provide the best approach to achieving benefits while preserving savings in, for example, transactions, activities, and functional business requirements. [1]
Today's term: cost-benefit analysis. Most of us are familiar with the term, and have a basic grasp of it. It refers to how a project or decision might be evaluated, comparing its costs with its ...
Standard Costing is a technique of Cost Accounting to compare the actual costs with standard costs (that are pre-defined) with the help of Variance Analysis. It is used to understand the variations of product costs in manufacturing. [6] Standard costing allocates fixed costs incurred in an accounting period to the goods produced during that period.
Industry Practices is a less dominant constraint compared to cost-benefit and materiality in financial reporting. [3] This constraints means in some industries, it is hard and costly to calculate the production costs and therefore companies in these particular industries choose to only report the current market prices instead of production ...
Triple bottom line (TBL or 3BL) is an accounting framework widely adopted by large organizations since its introduction in 1994 by John Elkington. [9] Organizations can use it to evaluate their performance in a broader perspective to create greater business value [10] or to make decisions on where to allocate resources for the highest organizational return for all key stakeholders.
In accounting, the cost principle is part of the generally accepted accounting principles. Assets should always be recorded at their cost, when the asset is new and ...
Modern accounting also incorporates the concept of opportunity cost into the determination of capital costs and capital structure of businesses, which must compute the cost of capital invested by the owner as a function of the ratio of human capital. In addition, opportunity costs are employed to determine to price for asset transfers between ...
b) Matching principle (Kieso, Weygandt and Warfield)p40 – this principle mandates that the costs (expenses) must follow revenues or adopt the best "rational and systematic" allocation of costs associated with the benefit, including assumptions about when the benefit (and therefore costs) are to be received. Clearly, managers who are required ...