Understanding Generally Accepted Accounting Principles of USA (GAAP)
Accounting standards in the USA are a set of accounting guidelines known as Generally Accepted Accounting Principles (GAAP). These standards govern how companies in the United States record and present their financial statements to regulatory authorities, investors, and all stakeholders. The Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB) developed and…
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What is a subordinated debt?
Subordinated debt refers to the debt owed to an unsecured creditor. In the event of the bankruptcy or liquidation of the debtor, the court will prioritize the outstanding loans which the liquidated assets shall repay. Therefore, subordinated debt can only be paid if any assets left after the claims of secured creditors have been met.…
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What is revaluation of assets/revaluation reserve?
A business usually owns capital assets like Plant and machinery, land and building, equipment etc. The values of these assets are periodically depreciated over their useful life span both for accounting and tax purposes. The revaluation of assets is stark opposite to planned depreciation where the recorded decline in value of these assets tied down…
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Origins of Accounting Principles or Concept of accounting
The Italian Luca Pacioli, recognized as The Father of accounting and bookkeeping was the first person to publish a work on double-entry bookkeeping, and introduced the field in Italy. The modern profession of the chartered accountant originated in Scotland in the nineteenth century. The main purpose of accounting principles is to guarantee that a business’s…
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New Accounting system / Value system accounting
The days of manual bookkeeping and ledgers are long gone as emerging technologies in accounting include AI-driven automation, blockchain for secure transactions, cloud-based accounting software, data analytics, and robotic process automation for streamlining repetitive tasks. These emerging technologies have revolutionized traditional accounting practices. Automation is allowing accountants to eliminate or streamline tedious manual tasks like…
View: Origins and Historical Perspectives of Accounting
Perhaps the concept of accounting has been around in the world in one form or another for centuries. When a barter system existed in the trading system the system of recording goods and services transactions must have been started. From the books of history, we read that Philosopher and economist Chanakya wrote “Arthashastra” in India…
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