Accelerated depreciation is a method of depreciating assets faster than the standard useful-life method, resulting in higher depreciation expenses earlier in the asset's life. This method is particularly useful for assets that lose their value quickly due to rapid innovation or technological change.
An accountant's lien is the right to retain possession of a client's goods or property until the client fulfills their financial obligations to the accountant.
Backdating refers to the practice of marking a document, check, or other financial instruments with a date that precedes the actual date. It is often used in accounting, finance, and legal contexts.
An essential concept in accounting and finance that pertains to providing capital for a company, managing its capital structure, converting reserves into capital, and accounting for capital expenditures.
An accounting practice or business policy designed to highlight the most profitable aspects of financial transactions or customer relationships while minimizing or excluding less profitable or loss-making elements.
The practice of mixing personal funds with client or customer funds by a fiduciary or trustee, which is generally prohibited by law unless an exact accounting is maintained.
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.
Extraordinary items are costs or income that affect a company's profit and loss account but do not derive from the ordinary activities of the company. These items are unusual, infrequent, and not expected to recur.
Formation expenses pertain to the costs incurred in establishing a company. As mandated by the Companies Act, they should not be recorded as an asset of the company.
The Fourth Company Law Directive, also known as the Fourth Accounting Directive, was an EU directive established in 1978 to harmonize company law and accounting practices among EU member states.
A hidden asset or reserve refers to asset value that is understated on the balance sheet of a company due to accounting conventions or deliberate action by management.
Funds held in reserve but not disclosed on the balance sheet, often referred to as off-balance-sheet reserves or secret reserves. Used historically within some UK banking institutions, these reserves are now effectively prohibited due to their potential for earnings manipulation and lack of transparency.
Marking to market, also known as fair value accounting, is the practice of valuing financial assets and liabilities according to their current market prices. It is a commonly applied method in accounting and finance but remains controversial due to its impact on financial statements.
An approach in accounting that aims to explain the existing practices and rationale behind accounting methods, rather than prescribing how accounting should be done.
Push Down Accounting refers to the practice in the USA of incorporating the fair value adjustments on acquisition, including goodwill, made by the acquiring company into the financial statements of the acquired subsidiary.
An in-depth overview of Sale and Repurchase Agreement (often referred to as repurchase agreement or repo) including definition, examples, FAQs, related terms, resources, and suggested readings.
A transaction intended to create the appearance of rights and obligations different from the actual intended agreements to deceive other parties, often tax authorities.
Window dressing refers to any practice aiming to make a financial situation appear more favorable than it really is, often used by accountants to enhance the look of balance sheets.
