The Finance Act 2020 had increased the tax audit limit for a person carrying on business from ₹1 crore to ₹5 crore, subject to a condition that cash receipts and cash payments during the year do not exceed 5 per cent of the total receipts/payments. The Finance Act 2021 further increased this limit to ₹10 …
Savings accounts Family wealth accounts Home loans Car loans Foreign exchange services De-mat account Favorite
Global factors like Russia-Ukraine conflict, soaring crude oil prices, and tightening of global financial conditions are the major reasons for the weakening of the Indian Rupee against the US Dollar. Favorite
The President of India is the head of state of the Republic of India. The president is the nominal head of the executive the first citizen of the country, as well as the commander-in-chief of the Indian Armed Forces. Droupadi Murmu is the 15th and current president, having taken office from 25 July 2022. Favorite
Foreign Exchange Reserves are cash and other reserve assets such as gold held by a central bank or other monetary authority that are primarily available to balance payments of the country, influence the foreign exchange rate of its currency, and to maintain confidence in financial markets. Reserves are held in one or more reserve currencies, …
In general, the treatment of excise duty paid in deferred tax follows the principles of temporary differences between the carrying amount of an asset or liability for accounting purposes and its tax base. If there is a temporary difference that results in taxable or deductible amounts in future periods related to the excise duty paid, …
The treatment of land in deferred tax depends on the accounting policies followed by the company and the applicable tax laws in the jurisdiction. Generally, land is considered a non-depreciable asset, and its value does not change over time for accounting purposes. However, for tax purposes, land may be subject to certain tax rules and …
The Comparable Uncontrolled Price (CUP) method is a transfer pricing technique used to determine the arm’s length price for transactions between related entities. It involves comparing the price of a controlled transaction with the price of a similar transaction between unrelated parties (uncontrolled transaction). The goal is to ensure that the pricing of intercompany transactions …
To check whether a purchase is real or inflated, you can perform the following procedures during an audit: Review purchase orders: Examine the purchase orders for accuracy, completeness, and proper authorization. Ensure that they include detailed descriptions of the goods or services being purchased, quantities, prices, and delivery terms. Verify supplier existence and credibility: Confirm …
Internal control refers to the system of policies, procedures, practices, and structures established within an organization to safeguard its assets, ensure accuracy and reliability of financial reporting, promote operational efficiency, and comply with laws and regulations. The primary goal of internal control is to minimize risks and provide reasonable assurance that the organization’s objectives are …
Financial instruments are contracts that give rise to a financial asset in one entity and a financial liability or equity instrument in another entity. They encompass a broad range of financial assets and liabilities, such as cash, trade receivables, loans, bonds, derivatives, and equity instruments. These instruments represent a key aspect of an entity’s financial …
Major audit areas, also termed audit components or cycles, encompass distinct sections of an organization’s financial statements and operations, focal points for auditors during audits. These areas facilitate methodical assessment of financial statements to ensure precision, adherence to accounting standards, and robust internal controls. Key audit areas encompass: Cash and Cash Equivalents: Validation of cash …
CIF (Cost, Insurance, and Freight) and FOB (Free On Board) are terms used in international trade to define the responsibilities and costs associated with the shipment and delivery of goods between buyers and sellers. These terms indicate who is responsible for various expenses, risks, and when ownership of the goods transfers from the seller to …
As per Indian Accounting Standard (Ind AS) 12, a deferred tax liability documented on a company’s balance sheet signifies an impending tax payment obligation in the future. This liability is computed by multiplying the company’s expected tax rate by the variance between its taxable income and accounting profit before taxes. The deferred tax liability accounts …
A Deferred Tax Liability is an entry on a company’s balance sheet, in accordance with Indian Accounting Standard (Ind AS) 12, signifying taxes that are payable in the future due to timing differences between their accrual and actual payment. The deferral arises from the contrasting timing of tax recognition and payment. Notably, a common instance …
The operating cycle, also known as the cash conversion cycle, is a vital financial metric that measures the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales. It reflects the efficiency of a company’s working capital management and provides insights into how quickly a …
In every profession there are bad apples. 400 CAs out of 350,000 is 0.1% A fair opportunity must be given to them to represent themselves. If it is proved that they have acted in a manner unbecoming of a CA and in violation of the Code of Ethics or the law, suitable action as prescribed …
Goodwill is only charged to the profit and loss (P&L) statement when there is an indication that its carrying value may be impaired, i.e., when the value of goodwill has decreased due to a loss in its revenue-generating capacity or some other adverse effect. If a company’s revenue-generating potential remains intact and there is no …
The ratio of Total Outside Liabilities (TOL) to Tangible Net Worth (TNW) is a financial metric used to assess a company’s financial leverage and risk. It provides insights into the proportion of a company’s total liabilities that are financed by its tangible net worth, which represents the net value of its tangible assets after deducting …
Gross Domestic Product (GDP) rate is a key economic indicator that measures the overall size and growth of a country’s economy over a specific period. It represents the total value of all goods and services produced within a country’s borders during a given time, typically measured on an annual basis. The GDP rate provides valuable …
The discount rate, often referred to as the required rate of return or cost of capital, is a crucial concept in finance used to determine the present value of future cash flows. It represents the rate of return an investor or company requires to justify investing in a particular project or asset, considering the inherent …
Section 194Q: Section 194Q was introduced by the Finance Act, 2021, and it applies to certain buyers who purchase goods from a resident seller. The key points are: Applicability: This section applies if the buyer’s turnover or gross receipts in the preceding financial year exceed Rs. 10 crores. Transaction Type: It is applicable to the …
To record the construction, demolition, and relocation of the tower, the following steps should be taken: Record the initial construction of the tower: Debit the Property, Plant, and Equipment (PPE) account for the cost of construction, which is 5 lakhs. Credit the Cash/Bank account for the same amount. Record the depreciation of the tower: Debit …
Solvency ratios are financial metrics that provide insights into a company’s ability to meet its long-term financial obligations and remain financially stable over time. These ratios focus on the company’s debt levels in relation to its assets, equity, and earnings. Here are some key solvency ratios that help assess financial stability: Debt-to-Equity Ratio: This ratio …
Which items in financial statements help you judge the financial stability? Read More »
Section 115BAA: Section 115BAA of the Income Tax Act pertains to the concessional tax regime for domestic companies. It allows domestic companies the option to pay income tax at a reduced rate of 22% (plus applicable surcharge and cess) if they do not claim certain deductions and exemptions. The reduced rate is applicable for companies …
Under Indian Accounting Standards (Ind AS), cash discounts are generally considered a reduction of the purchase cost of inventory and are deducted from the cost of the inventory rather than added to it. Reference: Ind AS 2, “Inventories” Paragraph 11 of Ind AS 2 states that the cost of inventory should include all costs of …
Suppose there is an inventory costing 100, cash discount is 2, will it be added to cost? Read More »
Section 17(5) of the Central Goods and Services Tax (CGST) Act, 2017 outlines the scenarios under which Input Tax Credit (ITC) is blocked and not available to a taxpayer. This provision restricts the claim of ITC on certain inputs, goods, and services. The exhaustive list of cases where ITC is blocked under Section 17(5) includes: …
The Insolvency and Bankruptcy Code (IBC) was introduced in India to address the pressing need for a comprehensive and efficient framework for dealing with insolvency and bankruptcy matters. It aimed to streamline and expedite the resolution process of distressed companies and individuals, promote a culture of entrepreneurship, enhance credit availability, and protect the interests of …
Section 234C of the Income Tax Act imposes interest on taxpayers who fail to pay their taxes on time during the fiscal year. The interest is calculated on the amount of tax that should have been paid as advance tax. The following are the key points related to interest under Section 234C: Interest under Section …
The purpose of Section 80M is to provide relief from double taxation of dividends, which can occur when profits are taxed both at the company level (dividend-paying company) and at the shareholder level (dividend-receiving company). Under the provisions of Section 80M, when a domestic company receives dividends from another domestic company in which it holds …
CASE NAME: VODAFONE INTERNATIONAL HOLDING V/S UNION OF INDIA The “Vodafone case” refers to a landmark legal and tax dispute involving Vodafone Group Plc, a multinational telecommunications company, and the Indian government. The case centered around the acquisition of Hutchison Essar, an Indian telecom company, by Vodafone in 2007. The dispute revolved around the interpretation …
A grandfathering clause is a provision in which an old rule continues to apply to some existing situations while a new rule will apply to all future cases. In the context of taxation, a grandfathering clause ensures that the tax levied on gains is prospective and is levied from the date of levy of such …
No, Long Term Capital Gains (LTCG) cannot be deducted with the amount invested in PPF under Section 80C of the Income Tax Act, 1961. Section 80C provides a deduction for specified investments and expenses up to a maximum of Rs. 1.5 lakhs in a financial year. LTCG is a separate tax calculation based on the …
If you have LTCG, can you deduct it with amount invested in PPF u/s 80C? Read More »
Certainly! One interesting and important concept in the realm of income tax is the provision of “Clubbing of Income,” often found in various sections of income tax laws across different countries. It aims to prevent the transfer of income from one individual to another, typically between family members, to reduce overall tax liability. This concept …
Tell me about a particular concept or section of Income Tax which you appreciate. Read More »
EBITDA removes the differences in profit arising on account of “newness” of assets or differences in Depreciation Method. 2 companies can be compared even if 1 follows SLM and the other WDV. If we used EBIT to compare an old airline company and a new airline company, the old one would appear more profitable (assuming …
Controls are mechanisms put in place within an organization to ensure that business processes, activities, and transactions operate effectively, efficiently, and in line with desired objectives. They encompass a range of policies, procedures, practices, and technologies aimed at preventing errors, reducing risks, and ensuring compliance. Procedures, on the other hand, are specific step-by-step instructions or …
What are controls? How are they different from Procedures? Read More »
Internal Audit, as defined by the Companies Act 2013 (Section 138), is an independent and objective assurance activity designed to add value and improve an organization’s operations. It helps accomplish organizational objectives by evaluating and improving the effectiveness of risk management, control, and governance processes. Internal auditors provide insights, recommendations, and assurance to management and …
As a fresher, my primary goal is to kickstart my career in the financial services industry and gain valuable experience. I am open to exploring various job roles that align with my educational background and skills. Ideally, I would be excited to start in an entry-level position where I can learn the ropes, understand the …
As a fresher, my expectations from Macquarie are aligned with my career aspirations and the values I hold. I anticipate a dynamic learning environment where I can apply the theoretical knowledge gained during my education to real-world financial scenarios. I look forward to being mentored by experienced professionals and being exposed to a wide array …
Certainly, here are two reasons why someone might consider joining Macquarie: Global Exposure and Opportunities: Macquarie is a renowned global financial services provider with a strong presence in various markets and regions. Joining Macquarie provides a unique opportunity to work on diverse projects, collaborate with professionals from around the world, and gain exposure to a …
Mr. Sashidhar Jagdishan is the Managing Director & Chief Executive Officer of the Bank. He succeeds Mr Aditya Puri, the iconic Managing Director who led the bank since inception and retired on October 26, 2020. Sashi as he’s known to his friends and colleagues, joined HDFC Bank in 1996 and has played a critical role …
Mr. Sandeep Bakhshi is the Managing Director and CEO of ICICI Bank since October 15, 2018. Prior to his appointment as MD & CEO, he was a Wholetime Director and the Chief Operating Officer (COO) of the Bank. Mr. Bakhshi has been with the ICICI Group since 1986 and has handled various assignments across the …
Tax Evasion: Tax Evasion is an illegal way to minimize tax liability through fraudulent techniques like deliberate under-statement of taxable income or inflating expenses. It is an unlawful attempt to reduce one’s tax burden. Tax Evasion is done with a motive of showing fewer profits in order to avoid tax burden. It involves illegal practices …
Differentiate between Tax planning & Tax evasion? Read More »
It’s important to keep up-to-date with the news and current affairs – It’s almost guaranteed to come up in an interview in some form. It’s also a good idea to brush-up your general knowledge. Here’s a list to get you started – National headlines of the last 30 days International headlines of the last 30 …
The GDP in 2021-22 was at ₹147.35 trillion, which is just 1.5% more than the GDP of ₹145.16 trillion achieved in 2019-20. Favorite
Basic examples of financial instruments are cheques, bonds, securities. There are typically three types of financial instruments: cash instruments, derivative instruments, and foreign exchange instruments. Favorite
IAS 16 Property, Plant and Equipment is the IFRS accounting standard that deals with fixed assets and depreciation.Component depreciation refers to a method of allocating the cost of an asset over its useful life by separately identifying and depreciating its individual components or parts. Instead of treating the entire asset as a single unit for …
The ITC rules for zero-rated supplies are as follows: Claiming ITC: Registered taxpayers making zero-rated supplies can claim a refund of the GST paid on inputs, input services, and capital goods used in the course of making such supplies. The ITC can be claimed through the electronic refund application. Export of goods or services: If …
Diminishing marginal utility is a concept in economics that states that the satisfaction or benefit derived from consuming an additional unit of a good or service decreases as the quantity consumed increases. In simpler terms, it means that the more of something we have or consume, the less satisfaction we get from each additional unit. …
The breakeven point (break-even price) for a trade or investment is determined by comparing the market price of an asset to the original cost; the breakeven point is reached when the two prices are equal. In corporate accounting, the breakeven point formula is determined by dividing the total fixed costs associated with production by the …
Form 3CD is a statement of particulars that must be filed with Form 3CA/3B, as appropriate, in compliance with Rule 6G and Section 44AB. In total, there are 41 clauses in Form 3CD (split into Part A and Part B) that contain disclosures on deductions, loans, and TDS (Tax Deducted at Source) paid, among other …
A block chain is a distributed database or ledger that is shared among the nodes of a computer network. As a database, a block chain stores information electronically in digital format. Block chains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralized record of transactions. …
Financial Analyst Financial analysts tend to work with the overall picture. They review financial decisions based on current market trends, stated business objectives, and possible investment options. These professionals’ evaluations help determine whether a project or venture is worthy enough for investment. There are two main types of financial analysis—fundamental analysis and technical analysis. Financial …
Difference between financial controller and financial analyst? Read More »
DEFINITION OF ASSERTION: It refers to the representations by management, explicit or otherwise, that are embodied in the financial statements, as used by the auditor to consider the different types of potential misstatements that may occur. In preparing financial statements, Company’s management makes implicit or explicit claims (i.e. assertions) regarding: A. Completeness; B. Existence/ occurrence; …
The current ratio is a liquidity ratio that measures whether a firm has enough resources to meet its short-term obligations. It compares a firm’s current assets to its current liabilities, and is expressed as follows:- Current ratio = Current Assets/Current Liabilities Favorite
HDFC is India’s largest private sector bank in terms of assets and market capitalization. It employs around 120,000 staff and operates a distribution network of 5,416 branches and 13,640 ATMs across 2,803 cities. ICICI Bank is India’s second-largest bank with total assets of about Rs 112,024 crore and a network of about 450 branches and …
Bringing a company like Adani to partner with HDFC would require a strategic and proactive approach. While I don’t have direct control over such decisions, I can provide a hypothetical strategy that could be considered in an interview scenario: Understanding Adani’s Needs: Thoroughly research Adani’s business operations, financial position, and strategic goals. Identify areas where …
Adani is with ICICI how will you bring them with us (HDFC)? Read More »
Tangible net worth is a financial measure that represents the net worth of a company, excluding intangible assets such as intellectual property, goodwill, and brand value. It focuses on the tangible assets and liabilities of a company, which are the physical assets and liabilities that can be measured and valued. To calculate tangible net worth, …
When the degree of operating leverage is higher than the degree of financial leverage, when the operations are very risky and there are fluctuating cash flows then this type of company should keep more equity. When the degree of financial leverage is higher than the degree of operating leverage, when the operations are less risky …
The cost of equity is generally higher compared to other sources of funding due to several factors: Higher Risk: Equity represents ownership in a company, which means equity investors bear the highest level of risk. Unlike debt holders who have a fixed claim on the company’s assets and income, equity investors have residual claims and …
In this condition, we have to capitalize it along with the project, we cannot separately classify it, the reason for this is any expenditure that is necessary to bring your asset to the location and condition necessary for the intended use by the management that we should capitalize , and it is directly attributable expenditure …
In the given scenario, where you are eligible for a 200% deduction under income tax on the purchase of machinery, it will impact the treatment of deferred tax assets and liabilities over the useful life of the machinery (5 years). Deferred tax assets and liabilities arise due to temporary differences between taxable income and accounting …
PPE should be derecognised (removed from PPE) either on disposal or when no future economic benefits are expected from its use or disposal. A gain or loss on disposal is recognised as the difference between the disposal proceeds and the carrying amount of the asset at the date of disposal. Favorite
Inflation rate refers to the percentage change in the general level of prices for goods and services over a specific period, typically a year. It measures the rate at which the purchasing power of a currency is eroded over time. Inflation is often expressed as an annual percentage increase in the Consumer Price Index (CPI) …
A trust is a fiduciary relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary. Trusts are established to provide legal protection for the trustor’s assets, to make sure those assets are distributed …
The most common capital investment evaluation tools are the Payback Period (PP), Return on Investment (ROI), Net Present Value (NPR), and Internal Rate of Return (IRR). Each method can provide insight into investment options, but each also has limitations. If net present value is positive, the project should be accepted. If internal rate of return …
How to evaluate investment in the concept of capital budgeting? Read More »
Terminal value is an estimate of the value of a project or investment at the end of its projected life or a specific period in the future. It represents the cash flow or value that is expected to continue beyond the forecast period. Terminal value is commonly used in financial valuation models, such as discounted …
What is terminal value and how you calculate the same? Read More »
We do not use a DCF if the company has unstable or unpredictable cash flows (tech or bio-tech start-up) or when debt and working capital serve a fundamentally different role. For example, banks and financial institutions do not re-invest debt and working capital is a huge part of their Balance Sheets – so you wouldn’t …
Consistency Principle Incremental Principle Separation Principle Post Tax Principle Favorite
The economic factors that influence corporate bond yields are interest rates, inflation, and economic growth. All these factors affect corporate bond yields and exert influence on each other. The pricing of corporate bond yields is a multivariable, dynamic process in which there are always competing pressures. For example, economic growth is bullish for corporations as …
What major factors affect the yield on a corporate bond? Read More »
The cost of equity is typically higher than the cost of debt, primarily due to the difference in the inherent risks associated with each source of financing. Cost of Debt: When a company raises funds through debt, it involves borrowing money from creditors (lenders) and agreeing to pay interest and principal over a specified period. …
What is typically higher – the cost of debt or the cost of equity? Read More »
Negative IRR indicates that the sum total of the post-investment cash flows is less than the initial investment, i.e. the non-discounted cash flows add up to a value which is less than the investment. Yes, both in theory and practice negative IRR exists, and it means that an investment loses money at the rate of …
Can the IRR be negative? Can IRR be positive and NPV be negative? Read More »
Minority Interest also referred to as non-controlling interest (NCI), is the share of ownership in a subsidiary’s equity that is not owned or controlled by the parent corporation. The parent company has a controlling interest of 50 to less than 100 percent in the subsidiary and reports financial results of the subsidiary consolidated with its …
Hedging is a risk management strategy used to minimize or offset potential losses or risks arising from price fluctuations or uncertain events in financial markets. It involves taking an opposing position or entering into a financial contract that is designed to mitigate the impact of adverse movements in the value of an asset, liability, or …
1.Map out the risks Whatever you do, it is important to properly map the risks inherent in your business so that your employees are aware of the best way that they can handle them. There must be absolutely no doubt in your employees mind what they must not do. Even with the best of intentions …
How to balance between compliances and growth of the organization? Read More »
Amitabh Chaudhry is the Managing Director & Chief Executive Officer (MD & CEO) of Axis Bank Limited. Amitabh Chaudhry, is an Engineer from Birla Institute of Technology and Science, Pilani and has done his Post Graduate in Business Management from IIM, Ahmedabad. He joined the Bank as its MD & CEO on 1st January 2019, …
The end goal of financial restructuring is to improve the financial health, stability, and sustainability of a company. It involves making strategic changes to the company’s financial structure, operations, and obligations in order to achieve specific objectives. The ultimate goals of financial restructuring can vary depending on the circumstances and challenges faced by the company, …
What is the end goal of a given financial restructuring? Read More »
▪ A company cannot meet its debt obligations / interest payments. ▪ Creditors can accelerate debt payments and force the company into bankruptcy. ▪ An acquisition has gone poorly, or a company has just written down the value of its assets steeply and needs extra capital to stay afloat (see investment banking industry). ▪ There …
Why would company go bankrupt in the first place? Read More »
Restructuring bankers advised distressed companies – businesses going bankrupt, in the midst of bankruptcy, or getting out of bankruptcy – and help them change their capital structure to get out of bankruptcy, avoid it in the first place, or assist with a sale of the company depending on the scenario. Favorite
Swap ratio refers to the ratio at which shares of one company are exchanged for shares of another company in a merger or acquisition. It determines the relative valuation or exchange rate of the shares involved in the transaction. When two companies decide to merge or when one company acquires another, they may agree to …
Divestiture refers to the process of selling or disposing of assets, business units, or subsidiaries by a company. It involves the deliberate decision to divest or exit certain operations or investments in order to streamline the business, focus on core activities, reduce costs, or improve financial performance. Divestiture can take various forms, including selling off …
Accounts payable (AP) and accounts receivable (AR) are two types of financial transactions that businesses engage in. Accounts payable (AP) represents the amount of money a company owes to its suppliers or vendors for the goods or services they have provided. In other words, it is the amount of money that a business owes to …
What is the difference between accounts payable and accounts receivable? Read More »
Accruals refer to expenses or revenues that have been recognized in the accounting records before they have been paid or received, respectively. They are recorded to reflect the economic activity of a business accurately, even if the cash transactions have not yet taken place. There are two types of accruals: Accrued expenses (Accrued liabilities): These …
Prepaid expenses are future expenses that have been paid in advance. You can think of prepaid expenses as costs that have been paid but have not yet been used up or have not yet expired. The amount of prepaid expenses that have not yet expired are reported on a company’s balance sheet as an asset. …
Adjusted Gross Revenue (AGR) is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT). It is divided into spectrum usage charges and licensing fees, pegged between 3-5 percent and 8 percent respectively. Summary of Supreme court judgements: 2005: Cellular Operators Association of India move the Telecom Disputes Settlement …
Dividend should be declared based on future needs of the organisation. If the company has positive NPV projects available do not declare dividend, else do. Alternatives to distribution of dividend: Buy back of shares: This comes out with advantages such as a. When the growth potential is limited they use unused cash to buy back …
How much dividend should we declare? Is there an alternative? Read More »
Section 80JJAA of the Income Tax Act, 1961 is a provision that allows eligible businesses to claim a deduction for additional employee cost incurred for the purpose of promoting employment. Here are the key details of this provision: Eligible Businesses: Section 80JJAA applies to Indian companies and partnership firms engaged in the manufacturing sector. Deduction …
Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life. It is NOT to reduce the value of the asset due to wear and tear. It is an allocation of Historical Cost ONLY. Similarly it is not bringing down an asset to its market value. Similarly, obsolescence is …
Difference between depreciation, amortisation and impairment? Read More »
A cash flow hedge is a risk management strategy used by businesses to mitigate the potential impact of future cash flow fluctuations. It involves entering into a financial derivative contract, such as a forward contract, futures contract, or swap, to offset the variability in cash flows arising from specific risks. The objective of a cash …
MARGINAL COSTING Marginal costing is generally a decision making, you have to use marginal costing when you want to decide whether you want to fulfil the next order or what my actual profit on the additional order. It is generally not used for accounting purpose but a decision making process. And it includes only variable …
Difference between marginal costing, absorption costing and standard costing? Read More »
The answer is, if you are not paying any dividend then there is opportunity cost for my investor and that opportunity cost is reflected in CAPM, so even if dividend is not being paid there is always a cost. It is measured using CAPM model which does not depend on whether the company is paying …
To evaluate whether to start the factory or not, a comprehensive financial analysis should be conducted. Here are some key steps to consider: Cost-Benefit Analysis: Assess the potential benefits and costs associated with the factory. Identify the expected revenue streams, market demand for the products, and potential profitability. Consider factors such as production costs, operational …
The main difference between EBITDA and cash flow from operation is working capital changes and taxes. In EBITDA, it is before tax and in cash flow from operations, it is after tax. The second difference is that EBITDA is on an accrual basis and cash flow from operations is on cash basis. Favorite
The following items are added to the cost of inventory: 1.Purchase price of goods 2.Direct labor costs incurred to bring the goods to their present location and condition 3.Direct overhead costs, such as rent, utilities, insurance, and depreciation of plant and equipment used in the production process 4.Freight-in or transportation costs incurred to acquire the …
There can be various reasons why one loss-making company may choose to take debt while the other may not. Some possible reasons could be: Risk tolerance: The company that has taken debt may have a higher risk tolerance and may be willing to take on more debt to finance its operations or expansion plans, whereas …
An operating segment is a component of an entity: (a) that engages in business activities from which it may earn revenues and incur expenses (b) whose operating results are regularly reviewed by the entity’s chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance; and …
Ind AS 36 “Impairment of Assets” deals with the testing of assets for impairment. It requires companies to evaluate their assets, including goodwill, to assess if there is any impairment in their value. If there is a significant decline in the recoverable amount of an asset, then it needs to be written down to its …
Actuarial goodwill arises when the purchase price of an entity exceeds the fair value of its net identifiable assets, and the excess cannot be attributed to any specific asset or liability. This excess represents the value of intangible assets, such as brand recognition, customer relationships, and intellectual property. In such a situation, an actuary can …
What is actuary goodwill, when it arise and what to do in that situation? Read More »
Expenses or payments not deductible in certain circumstances (1) The provisions of this section shall have effect notwithstanding anything to the contrary contained in any other provision of this Act relating to the computation of income under the head” Profits and gains of business or profession”. (2) (a) Where the assesse incurs any expenditure in …
Section 234B: Interest for defaults in payment of advance tax: This penalty provision activates in two cases: 1. If the assesse was liable to pay advance tax, but failed to deposit that. 2. If the amount deposited was less than 90% of the tax to be deposited. In both the above cases, assesse will be …
