Accounting

Accretion expense arises from an increase in the present value of a future liability over a specified period. It usually arises from asset retirements or restoration activities due to compliance or contractual requirements. What is an Accretion Expense? The accretion expense is a scheduled and incremental recognition of the change in the present value of […]

Control accounts show the summarized version of general journal accounts of a business. However, they are created for selective bookkeeping records only. A business can summarize its important subsidiary ledger accounts to show final balances as control accounts. It helps a business to keep an overview of important ledger accounts quickly. What is a Control

Accrued vacation pay is the paid time off that an employee has accumulated according to the company policy but hasn’t yet received. Like other accruals, the paid vacations accumulate over time too. An employee has the opportunity to receive cash or postpone the entitlement for future use. What is Accrued Vacation Pay? Accrued vacation pay

Borrowing entities pay commissions to investment banks, accounting, legal, and documentation costs to issue debt instruments like corporate bonds and notes. These costs along with debt discounts and premiums should be recorded as a reduction to the long-term financial facility on the balance sheet of the borrowing entity. These costs are then amortized to reflect

Amortized cost is the total cost charged through amortization or depreciation. It is the accumulated depreciation, depletion, or amortization of assets owned by a company. Let us dive in to know what is an amortized cost, where it is used in accounting, and what the advantages or disadvantages of amortized costs. What is an Amortized

Goodwill amortization is the process of gradually reducing the intangible goodwill asset by allocating an amortization expense. The amortization cost is spread over the useful life of intangible assets, in this case, goodwill which is 10 years as per the guidelines of the Financial Accounting Standards Board (FASB). An important concept linked to amortization is

Differential cost is the additional cost that comes with a financial decision. Put another way, it is the difference in costs between two available options. Differential costs arise due to a change in production volume, sale or purchase of assets, pursuit of new products, and similar other business situations. What is Differential Cost? Differential cost