Par value:- Par value is the amount of legal capital per share – that is, the amount below at which the stockholders’ equity cannot be reduced except by losses or special legal action.
Wednesday, December 3, 2014
What is Par value
Par value:- Par value is the amount of legal capital per share – that is, the amount below at which the stockholders’ equity cannot be reduced except by losses or special legal action.
What is Post balance sheet events
Post balance sheet events: Post balance sheet events have a
significant effect on the values shown in the accounts, and occur after
the balance sheet date but prior to the date on which the accounts are approved
by the directors. Some of those events make
more information available rather than altering the numbers as such. These are called adjusting events. An example of such an
event is a sale of a fixed asset when the sale is agreed during the financial
period but the final price is agreed after the end of the period. The final
price will be reflected in the balance sheet and the P &L Account. If a post balance sheet event is not an adjusting event but
it is material, then it should be disclosed separately in the results.
Types of investment
Types of investment:- There are three types of investment
i) Available-for-sale
ii) Trading
security
iii) Held to Maturity Security
i) Investment in
Available-for-sale securities:- Available-for-sale means the investment which is not held in active trading account
for immediate resale nor to be held to maturity. This type of investment is
reported at fair value and the unrealized gain and loss is recognized and
reported directly in shareholders’ equity.
ii) Investment in Trading
securities:- Trading
securities means the investment held in active trading account for immediate
resale. This type of investment is reported at fair value and the unrealized
gain and loss is recognized in statement of comprehensive income or profit and
loss account.
iii) Investment in Held to maturity Securities:- Held to maturity Securities means which is held until maturity. This type of investment is reported at cost value and the unrealized
holding gain and loss is not recognized.
What is Cost allocation base
Cost allocation base:- Cost allocation base is some factor or variable that is used to allocate costs in a
cost pool to cost objects. An example of a cost
allocation base may be the weight of materials handled for each production
department that uses material handling services.This base would be
used to assign the costs in the material handling cost pool to the production
departments.
What is Cost pool
Cost pool: Cost pool is a collection of costs that are to be assigned to cost objects.
Costs are often pooled because they have the same cost driver. An example of a cost pool is all costs related
to material handling in a manufacturing firm.
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