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What are the Tangible and intangible costs of information system?
Tangible costs are things than be touched, like money or properties. Intangible costs are things that do not have a physical appearance and cannot be touched.
What is the journal entry to write off financing costs?
Debit amortization of financing costCredit financing cost
Why is it important to match the type of asset and the source of financing?
Matching the type of asset and the source of financing is important because it helps to ensure that the financing used to acquire an asset is appropriate and sustainable over the long term. Different types of assets require different types of financing. For example, short-term assets, such as inventory or accounts receivable, may be better financed with short-term sources of financing, such as a line of credit or trade credit. Long-term assets, such as buildings or equipment, may require long-term financing, such as a mortgage or a term loan. If the type of asset and the source of financing are not appropriately matched, it can result in financial problems down the road. For example, if a long-term asset is financed with short-term debt, the debt may come due before the asset has generated enough cash flow to pay it off, potentially leading to default and financial distress. On the other hand, if short-term assets are financed with long-term debt, it may result in higher interest costs and a mismatch between the timing of cash inflows and outflows. In addition, matching the type of asset and the source of financing is important for managing risk. For example, if an asset is financed with too much debt, it may become difficult to make payments if there is a downturn in the economy or the company's cash flows decline. Overall, matching the type of asset and the source of financing is an important consideration for any business or individual looking to acquire assets and finance them in a sustainable and appropriate way
What is the recordable cost of a plant asset?
The record able cost of a plant asset is most likely the cost of the plant asset at acquisition. This would include equipment costs, training of employees, sales taxes, freight costs, and the like.
Why different sources of finance have different cost?
why different sources of financing have different costs
Is amortization of deferred financing costs a non cash item on the cash flow statement?
Firstly, what is deferred financing cost? Deferred financing costs is an accounting concept meaning costs associated with issuing debt (loans and bonds), such as various fees and commissions paid to investment banks, law firms, auditors, and so on. Since these payments generate future benefits, they are treated as an asset. The costs are capitalised, reflected in the balance sheet as an asset, and amortised over the finite life of the underlying debt instrument. Early debt repayment results in expensing these costs. In case of issuing securities without specific maturity, such as perpetual preferred stock, financing costs are not capitalised and expensed immediately.Deferred financing costs is an accounting concept meaning costs associated with issuing debt (loans and bonds), such as various fees and commissions paid to investment banks, law firms, auditors, and so on. Since these payments generate future benefits, they are treated as an asset. The costs are capitalised, reflected in the balance sheet as an asset, and amortised over the finite life of the underlying debt instrument. Early debt repayment results in expensing these costs. In case of issuing securities without specific maturity, such as perpetual preferred stock, financing costs are not capitalised and expensed immediately. Amortization of deferred financing cost is a non-cash expense & it is to be treated as a normal amortization as in for any other intangibles, if and only if, depending upon the nature of the business allows for the same. By nature of business, we can understand as if it is a mortgage company/ financing company, it can be treated as a normal intangible asset for such companies and such costs needs to be amortized as well for the consideration in the Cash Flow of the companies. Moreover, such costs are mere deferred charges for other kind of businesses, which do not fall under the like businesses as aforesaid.
What is an intangible cost?
An intangible assset is an asset that is not physical in nature such as patents, trademarks, copyrights, business methodologies, goodwill and brand recognition.An asset that is not physical in nature. Corporate intellectual property (items such as patents, trademarks, copyrights, business methodologies), goodwill and brand recognition are all common intangible assets in today's marketplace. An intangible asset can be classified as either indefinite or definite depending on the specifics of that asset. A company brand name is considered to be an indefinite asset, as it stays with the company as long as the company continues operations. However, if a company enters a legal agreement to operate under another company's patent, with no plans of extending the agreement, it would have a limited life and would be classified as a definite asset.
What are the Tangible and intangible costs of information system?
Tangible costs are things than be touched, like money or properties. Intangible costs are things that do not have a physical appearance and cannot be touched.
Intangible assets valued and reported in financial statement?
Intangible assets are reported by a company if they meet certain criteria. For example, if a company were to purchase a certain technology that it plans to use in its new product, then that technolgical intangible asset would be recorded on the balance sheet of the acquring company. However, if a company creates its own technology it is less likely that they will be able to record an asset for that development, in which case, the costs will be reflected immediately in the Company's profit and loss statement.
What is the journal entry to write off financing costs?
Debit amortization of financing costCredit financing cost
Why employees were not record on balance sheet asset side?
The main reason is that they would be classified as intangible assets. Intangible assets should only be included on the balance sheet when the costs are easily measurable. It would be very difficult to measure an employees value to a company. Also under ISA 38, internally generated goodwill is not allowable.
Why is it important to match the type of asset and the source of financing?
Matching the type of asset and the source of financing is important because it helps to ensure that the financing used to acquire an asset is appropriate and sustainable over the long term. Different types of assets require different types of financing. For example, short-term assets, such as inventory or accounts receivable, may be better financed with short-term sources of financing, such as a line of credit or trade credit. Long-term assets, such as buildings or equipment, may require long-term financing, such as a mortgage or a term loan. If the type of asset and the source of financing are not appropriately matched, it can result in financial problems down the road. For example, if a long-term asset is financed with short-term debt, the debt may come due before the asset has generated enough cash flow to pay it off, potentially leading to default and financial distress. On the other hand, if short-term assets are financed with long-term debt, it may result in higher interest costs and a mismatch between the timing of cash inflows and outflows. In addition, matching the type of asset and the source of financing is important for managing risk. For example, if an asset is financed with too much debt, it may become difficult to make payments if there is a downturn in the economy or the company's cash flows decline. Overall, matching the type of asset and the source of financing is an important consideration for any business or individual looking to acquire assets and finance them in a sustainable and appropriate way
What are your costs going to be with financing business?
The main cost in the financing business is the cost of bad debts.
Why different sources of finance have different costs?
why different sources of financing have different costs
Is Cost of goods sold an asset or liability?
it is asset>>...>.. Cost of goods sold (COGS) refer to the inventory costs of those goods a business has sold during a particular period. Costs are associated with particular goods using one of several formulas, including specific identification, first-in first-out (FIFO), or average cost. Costs include all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Costs of goods made by the business include material, labor, and allocated overhead. The costs of those goods not yet sold are deferred as costs of inventory until the inventory is sold or written down in value.No, it is not an asset, it is charged against revenue basically as an expense. Cost of goods manufactured, if not sold is inventory which is an asset. The key word is sold, if it is sold it is expensed.
Would costs incurred for advertising be considered revenue or expense?
it is considered as a deferred expense.
What is the recordable cost of a plant asset?
The record able cost of a plant asset is most likely the cost of the plant asset at acquisition. This would include equipment costs, training of employees, sales taxes, freight costs, and the like.
