The Depreciated Cost is the value of an asset after it has been reduced by any depreciation that has been charged against it. The purpose of depreciation is to allocate the cost of an asset over its useful life. This means that the cost of the asset is spread out over the number of years … Read more
Net Tangible Assets (NTA) is a term used to describe the value of a company’s physical assets minus any intangible assets and liabilities. This calculation is often used to give investors an idea of a company’s true worth, as it can be difficult to accurately assess the value of intangible assets such as patents or … Read more
A LIFO reserve is an allowance that is created when a company reports inventory on its balance sheet using the last-in, first-out (LIFO) method. The LIFO reserve is the difference between the LIFO value of inventory and the cost of the same inventory using another valuation method, such as the first-in, first-out (FIFO) method. The … Read more
Accounting profit is the total revenue of a company minus the total expenses of the company. This includes the costs of goods sold, operating expenses, and taxes. The resulting number is the company’s net income. What are the 3 types of profit? The 3 types of profit are gross profit, operating profit, and net profit. … Read more
Sum-of-the-Years’ Digits: Definition and How to Calculate What is Matheson formula? The Matheson formula is a mathematical formula used in accounting to calculate the present value of a perpetuity. A perpetuity is an annuity that pays out forever. The formula is: PV = PMT / r where PV is the present value, PMT is the … Read more
Modified accrual accounting is an accounting method that recognizes revenue when it is earned and records expenses when they are incurred. This method is used by many state and local governments in the United States. In modified accrual accounting, revenues are recognized when they are earned, which means when they are due and receivable. Expenses … Read more
The term “compliance cost” refers to the amount of money and resources that a company must expend in order to comply with government regulations. This can include the cost of complying with environmental regulations, safety regulations, and financial reporting requirements. In some cases, the compliance cost may be a direct cost, such as the cost … Read more
The Purpose and Definition of Comprehensive Income What are the 3 elements of a statement of comprehensive income for a service business? The three elements of a statement of comprehensive income for a service business are: 1) Revenue: This includes all income earned from providing services to customers, including any sales taxes or other fees … Read more
The factors of production are land, labor, capital, and entrepreneurship. These are the resources that are used to produce goods and services. Land: Land includes all of the natural resources that are used to produce goods and services. These resources can be renewable, like water and timber, or nonrenewable, like oil and minerals. Labor: Labor … Read more
What YOY Means How YOY is Used in Finance How do you calculate yoy growth for 3 years? To calculate yoy growth for 3 years, start by finding the year-over-year growth rate for each year. To do this, subtract the previous year’s ending value from the current year’s ending value, and divide by the previous … Read more
