Prudential norms for Income Recognition, Asset Classification, and provisioning
Prudential norms: The objective of prudential regulation is to protect the stability of the financial system and protect deposits so its main focus is on the safety and soundness of the banking system and on nonbanking financial companies (NBFCs) that take deposits from the public. Provisioning for bad debts under the Health Code-based system for…
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Understanding Treasury Stock: Definition, Key Aspects, and Strategic Purpose
DefinitionTreasury stock refers to shares that were previously issued by a company and subsequently repurchased from the open market. These shares are held by the company itself and are not considered part of the outstanding shares. As such, treasury shares do not confer voting rights, nor are they eligible for dividend payments. Key Aspects of…
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Components of Assets and Liabilities: A Comprehensive Overview
Assets and liabilities are fundamental components of an entity’s financial position, typically presented in the balance sheet. Understanding these components is essential for evaluating a company’s financial health, liquidity, and solvency. 1. Definition and Importance The relationship between assets and liabilities forms the basis of the accounting equation: Assets = Liabilities + Owner’s Equity This…
Read article Important items of Balance Sheet and components of balance sheet equations
A balance sheet is a financial statement of an entity that is prepared for reporting of financial position of the business as of a particular date. The balance sheet is divided into two sides, with assets on one side and liabilities and shareholders’ equity on the other. The left side of the balance sheet outlines…
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Role of Audit and inspection in Banks explained
Audits and inspections are both important activities that help ensure compliance with regulations and protocols, and they can be used in a variety of contexts, including safety, finances, and data security. The difference between Audits and inspections is that auditing is used to methodical examination of a facility’s accurate compliance with procedures and processes, to…
Accounting Standards: Definition and Scope of Ind-AS
Accounting standards are formal policy documents issued by expert accounting bodies, governments, or other regulatory authorities. These standards provide guidance on the recognition, measurement, presentation, and disclosure of accounting transactions in financial statements. Accounting standards address the following key areas:(a) Recognition – Identifying which events and transactions should be recorded in the financial statements,(b) Measurement…
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