In the cost recovery method provid is not recognized until the sum of the cash receipts exceed the costs of the asset sold. If for example a company sells a specific assets costing USD 40 000 for the price of USD 60 000 in year one, but the cash receipt is only USD 30 000 [...]
Archives for November, 2009
Instalment Sales Method
With the instalment sales method revenue is recognized at the point where cash is collected as opposed to when the sale occurs. That way gross profit is deferred and recognized proportionately to the collection of receivables. This method of accounting can only be used in cases where “the collection of the sale price is not [...]
Categorized in Accounting
Tags: Installment Sales Method
Constant Dollar Accounting
Under SFAS 89 companies are encouraged, but not required, to report their financial statements in US dollars, as well as provide information on the effects if changing prices. One accounting method in line with this standard is constant dollar accounting. Under constant dollar accounting the items on the financial statements are reported in dollars which have [...]
Categorized in Accounting
Held-to-maturity, Available-for-sale, and Trading Category
Under US GAAP debt and marketable equity seucurities have to be classified into one of the three categories:
Held-to-maturity. If the entity has the intent and the abilitiy to hold the debt security until maturity, it may classify the security as held to maturity. Since equity securities have no maturity, it only applies to debt securities. [...]
Categorized in Accounting, Investment Accounting
Intellectual Property
The regulations governing those rights to use inventions can vary widely between countries and states. Let us nevertheless now give an intro to the different intellectual property “rights”. Commonly, the following four “rights” exist:
Patent. It is an exclusive right given to the inventor to use an invention or process for a specified period of time. A patent [...]
Categorized in Intellectual Property
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