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…...
You can mention the names of any ERPs you have worked on (including Tally) since most have some features relevant to Budgeting and Forecasting. The feature of creating Cost Centres is meant for budgeting and tracking Some commonly used ERPs for : ● SAP ● Hyperion ● Adaptive Insights ● TM1 ● Horizon For most…...
Valuation is the process of determining “Value”. It ultimately answers the question “What should I pay” for any asset, instrument or a company. Valuation can be categorised based on Relative Valuation (using PE ratio of peers) and Intrinsic Valuation (using DCF) It can also be classified into Asset based Valuation and Earnings Based Valuation (This…...
Past data is usually the best starting point for both forecasting and budgeting. An exception is zero based budgeting (where past data is not used). While building a budget, following steps can be followed: a) Reviewing and understanding all the required inputs for your budget. b) Analyzing previous budgets and other historical data. This will…...
● Budgeting – Budgeting creates a baseline to compare actual results to determine how the results vary from the expected performance. It is setting a target. It is more relevant for items that are under your control such as costs ● Forecasting- Forecasting estimates a company’s future outcomes. Financial forecasting allows management teams to anticipate…...
