A non-SSTB entity may still be characterized as an SSTB, or have a portion of its income be considered from an SSTB, if it provides property or services to an SSTB related through common ownership. In this case, common ownership is considered as having 50% or more common owners, after applying the direct and indirect […]
In straight-line depreciation, the same amount is depreciated each year over the asset’s useful life. In contrast, the declining balance method involves depreciating a larger portion of the asset’s value in the early years of its useful life, with the amount decreasing over time. Listed property meets the predominant use test for any tax year […]
The discount rate, or the rate used to adjust future cash flow for current economic conditions, may also be called the interest rate when analyzing NPV. The time period for NPV applies if you have a set time limit to receive the returns. For example, if the project is a limited edition line of merchandise, […]
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(c) The rate specified in the contract must also be a “regular” rate which is operative in determining the total amount of the employee’s compensation. Suppose, for example, that the compensation of an employee is normally made up in part by regular bonuses, commissions, or the like. In the past he has been employed at […]
One of the simplest methods to apportion joint cost is the average unit cost method. Here, the average cost per unit is calculated by simply dividing the total cost of all the joint products incurred before their splitting-off, by the total of the number of units produced all together. Net realizable value method When such […]
The distribution of net income to the company shareholders is shown as the debit balance of Dividends account which must be closed to the debit of Retaining Earnings. Since there are several types of errors that trial balances fail to uncover, each closing entry must be journalized and posted carefully. The balances of the nominal […]
However, you can determine the revalued amount of the asset only if there exists an active market for such an asset. In other words, you will come to know about the three criteria on the basis of which you would decide whether an asset is Intangible or not. Here, it is important to understand the […]
And in some states, companies can declare dividends from current earnings despite an accumulated deficit. The financial advisability of declaring a dividend depends on the cash position of the corporation. A company that lacks sufficient cash for a cash dividend may declare a stock dividend to satisfy its shareholders. Note that in the long run […]
In accounting, you’ll come across certain titles which appear to bear similar duties but actually have unique job descriptions. In this section, we’ll briefly review the roles of accountants vs. CPAs and tax professionals. Generally speaking, however, attention to detail is a key component in accountancy, since accountants https://simple-accounting.org/ must be able to diagnose and […]