Articles
Lessors and Direct Financing Capital Leases
When a financing firm enters into a direct financing capital lease, the lessor reduces PPE shown on its balance sheet an...
Lessors and Sales-Type Capital Leases
When a lessor enters a sales-type capital lease, several journal entries will be made to account for the transaction: ...
Lessor Accounting for Leases
Under US GAAP, a lessor must capitalize a lease if any of the four lessee conditions for capitalization are present, PLU...
Effects of Leases on Selected Financial Reporting Items for ...
The table below summarizes the effects of operating and capital leases on selected financial reporting items for lessees...
Lessee Accounting
Under US GAAP, lessee is required to capitalize a lease if ANY of the following conditions are met: Lease ownership ...
Capital Leases and Operating Leases
A lease can be an operating lease or a capital lease. Operating Lease – Typically a short-term lease where the lessor...
Leasing Vs. Purchasing Assets
A firm may choose to purchase outright a long-lived asset, such as an airplane or an office building, giving the firm fu...
Presentation and Disclosures Related to Debt
Presentation The non-current (Long-term) debt usually appears as a single line item on the balance sheet which shows th...
Role of Debt Covenants
A bond indenture is a formal written agreement between the issuer of the bond such as a corporation and the bondholders....
Derecognition of Debt
The issuer of a bond can either hold the bond till maturity or redeem it before maturity. Let’s look at the accounting t...
Bond Amortization, Interest Expense, and Interest Payments
Once a bond has been issued and bonds payable liability has been created, the company will pay periodic interest payment...
Recognition and Measurement of Bonds
The initial accounting and measurement of bonds is undertaken in the following way. When the bond is issued, it could...
Bonds
A bond is an IOU between the issuer and the investors. An option free (straight line) bond is a simple form of bond. Str...
IT Accounting under IFRS and US GAAP
Even though IFRS and US GAAP have similar treatment of income tax issues, there are some differences. These differences ...
Disclosures for Deferred Tax Items
The following information about the deferred tax items is usually disclosed: Total of all deferred tax liabilities (...
Valuation Allowance for Deferred Tax Assets
A deferred tax asset is created due to a temporary difference between accounting profits and taxable income and the comp...
Permanent and Temporary Differences Between Taxable Income a...
A permanent difference between taxable income and accounting profits results when a revenue (gain) or expense (loss) ent...
Example of a Deferred Tax Liability
We have the following information about an asset of a company. Original cost: $1,500,000 Useful life of the asset:...
Tax Base of Assets and Liabilities
Tax base is the amount at which an asset or liability is valued for tax purposes. Tax Base of Assets The following are...
Deferred Tax Liabilities and Assets
A deferred tax liability is created when the income tax expense reported in the income statement is higher than the tax ...
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