An accounting procedure is the specific accounting method that a company uses to handle routine accounting matters. These procedures may be written in a manual to assist new employees in learning the system.
A 'Change in Accounting Method' refers to an alteration in the overall method of accounting or a change in a material item used in an overall accounting plan. This could involve changes such as switching from cash basis accounting to accrual basis accounting, or altering inventory valuation methods.
The completed-contract method is an accounting approach where net profit on a long-term contract is reported only when the contract is fully completed. Pre-completion expenses are also deferred until the project is finished.
Current-Cost Accounting (CCA) adjusts the value of assets and profits to account for changes in prices over time, providing a more accurate reflection of a company’s financial position.
A method of accelerated depreciation where a percentage rate of depreciation is applied to the undepreciated balance, rather than the original cost. It is commonly used to depreciate assets that lose value quickly early in their useful lives.
The direct write-off method is a process where bad debts are written off as they occur instead of creating a provision for them. While this method is unacceptable for financial reporting purposes under GAAP, it is the only method allowed for tax purposes in the United States.
Discovery value accounting is a widely used method in the USA for extractive enterprises, where increases in discovered reserves elevate the value of assets and predict future earnings.
In the USA, a method of expressing the value of an inventory in monetary values rather than units. Each homogeneous group of inventory items is converted into base-year prices using appropriate price indices. The difference between opening and closing inventories is measured in monetary terms of the change during the accounting period.
Events accounting is a method of accounting wherein data is stored and reported based on specific events, rather than being organized chronologically or by other methods.
FIFO, or First In, First Out, is an inventory valuation method where the oldest inventory items are recorded as sold first. This method is commonly used in accounting and finance to manage inventory costs.
The method used for a cash-flow statement in which the operating profit is adjusted for non-cash charges and credits to reconcile it with the net cash flow from operating activities.
A method of inventory valuation in which the most recent items acquired are considered the first to be sold. It affects accounting and taxation outcomes, particularly in periods of rising prices.
An accounting method where the most recently acquired or produced items are used first for financial measurement and inventory management.
Pooling of interests was an accounting method, previously utilized in mergers and acquisitions, allowing the combining of companies' balance sheets by line item additions of their assets and liabilities.
The pooling-of-interests method was an accounting approach previously used in business combinations in the USA, reflecting the continuation of the acquired company's accounts at book value.
An accounting system designed to account for changes in general price levels (inflation or deflation), making it an alternative to historical-cost accounting.
Preceding-Year Basis (PYB) is an accounting method used for reporting financial activities of one year in comparison with the preceding year. This approach allows businesses to analyze and compare financial performance over consecutive fiscal years.
Real Terms Accounting refers to an accounting method that adjusts financial statements for inflation to reflect the real value of money over time, providing a more accurate representation of an entity's financial position.
An accounting method that records transactions based on the actual receipt or payment of cash rather than when the transaction occurs.
The accrual of bad-debt expense based on the projected worthlessness of receivables or prior experience with uncollectible receivables. The reserve method is permitted only for some small banks and thrift institutions with assets of $500 million or less, while other accrual taxpayers must use the specific charge-off method.
A bookkeeping system that records only one aspect of each transaction, either a debit or a credit. Unlike double-entry bookkeeping, it does not balance. Single-entry bookkeeping is simpler and often used by small businesses.
A method of valuing inventory that calculates the cost of goods sold and ending inventory based on the average cost of all units available for sale during the period.
