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Why is the valuation of inventories important in financial reporting?
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Why it is important for financial manager to understand the valuation process?
Valuation is the process of determining the current worth of an asset or company. It is very important to know the method of valuation and whether is done as required by all statutory bodies concerning the same. It has a direct impact on stock prices as analysts determine based on companies earning and the worthiness of the company. Even the banks and financial institutions who provide loan to an enterprise wants to provide / extend credit facility only based on its worthiness which valuation is going to provide. It is also important to know the actual state of business to make any important decisions. Hence it is important for a financial manager to understand the valuation process so that they know where do they stand and also helps understanding if they were valued correctly.
Can you switch from lifo to fifo and then back to lifo?
You cannot switch in between inventory valuation methods to manipulate earnings. Disclosures are required in financial statements for the change in valuation methods.
Changing the method of inventory valuation should be reported in the financial statements under what qualitative characteristic of accounting information?
timeliness
Procedure of valuation of goodwill?
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What is the relation between accounting theory and accounting practices?
Accounting theory examines practical and theoretical issues in accounting practices such as historical costs, decision usefulness, portfolio risk, fair-value-oriented standards and executive management compensation and earnings. In addition, it also discusses economic and political issues and criteria related to accounting practices required by accounting governing bodies such as Canadian Institute of Chartered Accountant (CICA), Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB). The first goal of accounting theory is to describe and explore various theories that underlie financial accounting and reporting. The second goal is to explain and illustrate the relevance of these theories in order to understand the practice of accounting and reporting. Some of the main theories are based on economics and finance. For instance, by discounting future cash flows to present time, the present value model enables a theoretically correct basis of asset and liability valuation and income measurement of a firm. Thus, the present value model provides a benchmark to guide accounting practice. From a finance stand point, portfolio and efficient market theory are used in accounting practices in understanding how investors make rational investment decisions and how they use financial accounting information to make their decisions. Accountants can then prepare financial statements that are of greatest use to investors. To put in a nutshell, accounting theory helps to understand the impact of complex ideas and regulations on financial reporting and the interpretation of information generated by financial reporting at the conceptual level.
What has the author Michael Wohlgemuth written?
Michael Wohlgemuth has written: 'Die Planherstellkosten als Bewertungsmassstab der Halbund Fertigfabrikate' -- subject(s): Financial statements, Inventories, Valuation
What has the author Gertrude Mulcahy written?
Gertrude Mulcahy has written: 'Use and meaning of \\' -- subject(s): Inventories, Valuation
Why it is important for financial manager to understand the valuation process?
Valuation is the process of determining the current worth of an asset or company. It is very important to know the method of valuation and whether is done as required by all statutory bodies concerning the same. It has a direct impact on stock prices as analysts determine based on companies earning and the worthiness of the company. Even the banks and financial institutions who provide loan to an enterprise wants to provide / extend credit facility only based on its worthiness which valuation is going to provide. It is also important to know the actual state of business to make any important decisions. Hence it is important for a financial manager to understand the valuation process so that they know where do they stand and also helps understanding if they were valued correctly.
What is the valuation of a financial asset based on?
In finance, valuation is the process of estimating what something is worth. The valuation of a financial asset is based on the absolute value, relative value, or option pricing models.
How are diesel oil inventories measured?
They are measured by the gallon and converted to dollars based on the inventory valuation method being used.
What has the author Krishna G Palepu written?
Krishna G. Palepu has written: 'Introduction to business analysis & valuation' -- subject(s): Business enterprises, Valuation, Financial statements, Case studies 'Business Analysis and Valuation' 'Business Analysis and Valuation: Using Financial Statements'
What is portfolio accounting?
Portfolio Accounting primarily deals with valuation and follow-up processing for the financial business concluded in Portfolio Management (monitoring, correspondence processing, payment processing, key-date processing). It is also concerned with the maintenance of position keeping for financial instruments - with regard to corporate actions, such as interest and dividend payments. All sub ledger and general ledger accounting activities connected to financial investments made by the company form the core element of Portfolio Accounting. This includes the initial update of financial business and the execution of period-end closing. Legal requirements (like IFRS) also currently necessitate parallel valuation and creation of financial statements, based on various international financial reporting standards. The consolidation and fulfilment of legal statutory reporting also need to be assigned to Portfolio Accounting.
How is valuation of financial assets related to cash flow?
adf adf
Growth rate in Dividend discount model of valuation?
The dividend discount model of valuation is one strategy for investing in financial markets. The growth rate of this valuation determines whether investment is profitable.
Can you switch from lifo to fifo and then back to lifo?
You cannot switch in between inventory valuation methods to manipulate earnings. Disclosures are required in financial statements for the change in valuation methods.
What has the author Francesco Schiavon written?
Francesco Schiavon has written: 'Il nuovo conto profitti e perdite' -- subject(s): Accounting, Corporations, Financial statements, Law and legislation 'La valutazione delle rimanenze d'esercizio' -- subject(s): Inventories, Valuation 'Guida assicurativa' -- subject(s): Automobile Insurance, Insurance law, Law and legislation
What has the author Ramon E Johnson written?
Ramon E. Johnson has written: 'Field of Membership and Performance' 'Financial valuation and analysis' -- subject(s): Business mathematics, Present value analysis, Valuation
