See Also: Current Assets Fixed Assets Balance Sheet Income Statement Depreciation Asset Disposal Definition Asset disposal is the act of selling an asset usually a long term asset that has been depreciated over its useful life like production equipment. Disposal of Assets Explanation According to its depreciation, many companies contain an asset disposal policy to
See also: Capital Project Adding Value as a Financial Leader Balance the Balance Sheet Debit versus Credit Does Your Management Team Understand the Financials? When examining the term “contra asset account,” look no further than the root of contra to get a vague grasp of the definition. Because contra means “against,” one could quickly conclude
See Also: Basis Points Make or Buy Business Decision Collateralized Debt Obligations Carried Interests Letter of Credit Basis Definition In accounting, the basis definition is the value of an asset for tax purposes. The basis of an asset is the cost of the asset reported to the Internal Revenue Service (IRS). It includes the original purchase price of the asset
See Also: Marginal Tax Rate Prepaid Income Tax Tax Brackets Flat Tax Rates Deferred Income Tax Cash Flow After Tax In finance, analysts calculate after-tax cash flows to determine the cash flows of an investment or corporate project. Basically, the analyst calculates the after tax earnings of the investment or project, and then adds back
See Also: Capitalization Capitalized Interest Operating Capital Lease Agreements Capital Lease Agreement Capitalize Definition The Capitalize Definition is the act of classifying an expense or charge as a long term investment. This usually occurs for the purchase of long term assets like equipment. Capitalize Meaning Look further into the capitalize meaning… If a company capitalizes
See Also: EBITDA Definition EBITDA Valuation Operating Income (EBIT) Operating Profit Margin Ratio Analysis Net Income Adjusted EBITDA Calculate EBITDA Calculate EBITDA (Earnings before Interest, Tax, Depreciation, and Amortization) in three easy steps. For an EBITDA meaning and use in valuation, click the above links for a better description. EBITDA Calculation Formula Step 1) The
See Also: Accounting Income vs Economic Income Economic Value Added Value Drivers:Building Reliable Systems to Sustain Growth Basis Definition Variance Analysis Goodwill Impairment Asset Market Value versus Asset Book Value Book value and market value are two ways to value an asset. An asset’s book value can differ from its market value. Market value is the
In accounting, amortization refers to the periodic expensing of the value of an intangible asset. Similar to depreciation of tangible assets, intangible assets are typically expensed over the course of the asset’s useful life. It represents reduction in value of the intangible asset due to usage or obsolescence. Basically, intangible assets decrease in value over time, and amortization
See Also: Accounting Principles Probable Losses Subsequent Events Business Segments How to Make Dramatic Changes in Business Planning Your Exit Strategy Percentage Completion Method What Your Banker Wants You To Know Accounting Changes Accounting changes and error corrections are the switch from one principle of accounting to another – like with inventory and recognition of
See Also: Accelerated Method of Depreciation Double Declining Method Depreciation Straight Line Depreciation Amortization Fixed Assets – NonCurrent Assets Balance Sheet Contra Asset Account Accounting Depreciation Definition The accounting depreciation definition is the allocation of the cost of a tangible asset over its useful life. The idea is to match the cost of the asset to
Accumulated Amortization of Assets Definition To understand the accumulated amortization of assets, understand that the assets in question are intangible in nature. These assets are usually long-term and are not physical in nature. Achieve accumulated amortization through the reduction of the intangible account lump sum incrementally. Over the life of the asset in question, calculate
How often have you heard a business owner say “Why would anyone include depreciation, or rent, or insurance and many similar costs, in their Cost of Goods Sold? It’s best to keep it simple!” They want to apply the KISS Principle, but it can be simply stupid. The KISS Principle can be “Simply Stupid” Well
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