Some of the basic accounting terms that you will learn include revenues, expenses, assets, liabilities, income statement, balance sheet, and statement of cash flows. You will become familiar with accounting debits and credits as we show you how to record transactions.
Revenue recognition is an accounting principle that outlines the specific conditions under which revenue. In accounting, the terms “sales” and “revenue” can be, and often are, used interchangeably, to mean the same thing. Revenue does not necessarily mean cash received. is recognized.
Accounting for Current Assets and Liabilities
On a balance sheet, assets will typically be classified into current assets and long-term assets. The current ratio is calculated by dividing total current assets by total current liabilities. It is frequently used as an indicator of a company’s liquidity, which is its ability to meet short-term obligations.
Non-current assets are assets which represent a longer-term investment and cannot be converted into cash quickly. They are likely to be held by a company for more than a year. Examples of non-current assets include land, property, investments in other companies, machinery and equipment.
An intangible asset is an asset that lacks physical substance; in contrast to physical assets, such as machinery and buildings, and financial assets such as government securities. An intangible asset is usually very hard to evaluate.
Research and Development Costs
Research and development costs are the costs incurred in a planned search for new knowledge and in translating such knowledge into new products or processes. Other companies capitalised those costs that related to proven products and expended the rest as incurred.
In financial accounting, a provision is an account which records a present liability of an entity. The recording of the liability in the entity’s balance sheet is matched to an appropriate expense account in the entity’s income statement.
The Analysis Framework
In summary, an analytical framework is used as it, Underpins, supports and guides the collection, collation, storage and analysis of data by identifying key analytical outputs and products at each step of the analysis. Provides a way to organise what data to collect and how to analyse it.
A financial instrument is a monetary contract between parties. We can create, trade, or modify them. We can also settle them. A financial instrument may be evidence of ownership of part of something, as in stocks and shares. Bonds, which are contractual rights to receive cash, are financial instruments.
Group accounts are prepared in accordance with the substance over form concept. While the parent and subsidiary are separate legal entities, group accounts are prepared as if they were a single entity.
Accounting and Financial Analysis provides the skills and knowledge of
- Analyse the income statement and balance sheet. Examine key financial concepts such as economic profit, EBIT, capital, equity, leverage and GAAP standards.
- An investigation of the impact of different accounting treatments on key analysis metrics.
- Develop your understanding of assets and liabilities, and how M&A impacts your financial statements.
- Understand the nature of income, including measurement strategies, analysis of cash flow and prediction of financial distress.
- Gain skills in financial modelling-forecast and strategies for the future of your business by projecting its financial statements.
- Learn how companies are evolving their balance sheet models in pursuit of economic value.
- An understanding of the complex areas of accounting and analysis, and how accounting treatments can impact the assessment of corporate performance and position.