When a company acquires interest in another company, it must establish a relationship. If this relationship is deemed “controlling”, the parent company must prepare consolidated financial statements. What are Consolidated Financial Statements? Consolidated financial statements are a crucial tool in financial reporting that combines the financial information of a parent …

Economic Order Quantity (EOQ) is a fundamental concept in business, specifically in inventory management. It’s a tool that aids companies in smartly managing their stock levels. It’s an important concept in managing supply chain operations, as it helps companies strike the right balance between inventory holding costs and ordering costs. …

Accounting for leases is a complicated topic. With recent changes, the IFRS has clarified how companies can distinguish a capital lease. This standard also guides on what the accounting treatment is. What is a Capital Lease? A capital lease, often referred to as a finance lease, is a lease agreement …

When it comes to business operations including purchasing stuff, different parties are involved in the supply chain. The order of these parties or organizations is known as the supply chain. Most companies with limited reach and budget might have to rely on third-party suppliers to provide them with goods and …

Governments need funds to finance activities. These funds may come from various sources. One of these is operations run by a government to generate income. In accounting, they fall under proprietary funds. What is the Proprietary Fund? A proprietary fund is a specialized accounting category employed in government accounting to …

When it comes to business expenses, there are certain costs that play a major role in determining the overall cost structure. By understanding a company’s cost structures owners can make informed decisions about pricing, budgeting, and forecasting. Plus, it is a great indicator for investors as it shows how money …

There are two types of accounts in finance. The first type keeps a balance that companies carry over to the next period. On the other hand, the second type only keeps figures for one fiscal period. The latter are known as nominal accounts. What is a Nominal Account? A nominal …

When it comes to business acquisition, there are different methods that can be used for the acquisition process. One of the common methods is known as a “bear hug”. This term refers to a negotiation tactic in which one company sends an offer letter directly to another company’s board of …

Fraud is a deliberate and deceptive act performed to secure unfair or unlawful financial or personal gain. It involves actions such as misrepresentation, forgery, embezzlement, or the manipulation of information or assets, typically conducted to deceive others. In auditing and finance, fraud is a significant concern. Auditors may use several …

When it comes to the world of business, risks are as common as opportunities. Among them, operating risk stands as a hidden giant, as it influences the course of a business’s journey. It’s a term that is commonly used in corporate conversations, which shows potential pitfalls and prospects. Understanding this …