What would cause a decrease in accumulated depreciation?

July 7, 2024 No Comments

A: When a company’s accumulated depreciation decreases, it is normally due to the sale of a long-term fixed asset or group of long-term fixed assets. The accumulated depreciation is the total amount of periodic depreciation expenses for a fixed asset or group of fixed assets

What would cause a decrease in accumulated depreciation?

July 9, 2024 No Comments

When and why does goodwill impairment occur?

June 30, 2024 No Comments

A: Goodwill impairment occurs when a company decides to pay more than book value for the acquisition of an asset, and then the value of that asset declines. The difference between the amount that the company paid for the asset and the book value of

When and why does goodwill impairment occur?

July 7, 2024 No Comments

When and why does goodwill impairment occur?

July 9, 2024 No Comments

When and why should the terminal value be discounted?

July 9, 2024 No Comments

A: Typically, an asset’s terminal value is added to future cash flow projections and discounted to the present day. Discounting is performed because the terminal value is used to link money value between two different points in time. Though there are several terminal value formulas,

When and why were GAAP first established?

June 30, 2024 No Comments

A: Following the stock market crash of 1929, the U.S. government sought ways to regulate the practices of publicly traded companies and other major market participants. Authority to set standards on accounting practices was granted to the Securities and Exchange Commission (SEC). The SEC decided

When and why were GAAP first established?

July 7, 2024 No Comments

When are businesses required to use accrual accounting?

July 9, 2024 No Comments

A: Accrual accounting involves stating revenues and expenses as they occur, not necessarily when cash is received or paid out. In contrast, cash accounting systems do not report any income or expenses until the cash actually changes hands. In general, most businesses use accrual accounting,

When are expenses and revenues counted in accrual accounting?

June 30, 2024 No Comments

A: Under the accrual basis of accounting, revenues and expenses are counted when they are earned. This is different from the cash basis of accounting, where they are reported whenever cash actually flows in and out of the business. Most accountants consider the accrual accounting

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