Tag: depreciation

Standard Chart of Accounts

See Also: Chart of Accounts (COA) Problems in Chart of Accounts Design Complex Number for SGA Expenses Role of a Company Back Office Standard Chart of Accounts In accounting, a standard chart of accounts is a numbered list of the accounts that comprise a company’s general ledger. Furthermore, the company chart of accounts is basically a filing system for categorizing all of

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Accelerated Method of Depreciation

See Also: Depreciation Straight Line Depreciation Amortization Fixed Assets – NonCurrent Assets Balance Sheet Projections Accelerated Method of Depreciation Definition An accelerated method of depreciation definition is any depreciation method that expenses the cost of a tangible asset over its useful life at a rate faster than the straight-line method of depreciation. Furthermore, these methods

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What is GAAP?

What is GAAP? GAAP stands for Generally Accepted Accounting Principles. It is the set of rules and guidelines for U.S. companies to follow. GAAP regulates financial reporting for public companies, private businesses, non-profits, and government authorities. This means that GAAP outlines the procedures to make sure that businesses are recording their financials in the same

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Tax Abatement

Tax Abatement Definition Tax abatement, defined as the decreasing of the tax responsibility of a firm by government, is one of the tools which government uses to motivate behavior in a firm. A tax abatement credit is generally given to a firm when the government wants the saved money to be spent in another way:

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Scrap Value

See Also: Adjusted Present Value (APV) Asset Market Value vs Asset Book Value Future Value Going Concern Value Customer Analysis Scrap Value Definition The scrap value definition, also known as salvage value, is the value of an asset after it is fully depreciated. Once an asset reaches the point where it is fully depreciated, has

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Replacement Costs

See Also: Sunk Costs Asset Market Value vs Asset Book Value Accelerated Method of Depreciation Straight Line Depreciation Double Declining Method of Depreciation Replacement Costs Definition In accounting, the replacement costs definition is the current market price a company would have to pay to replace an existing asset. This is in contrast to book value.

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Modified Accelerated Cost Recovery System (MACRS)

See Also: Straight Line Depreciation Double Declining Depreciation Method Accelerated Method of Depreciation Financial Accounting Standards Board (FASB) Generally Accepted Accounting Principles Modified Accelerated Cost Recovery System Definition The modified accelerated cost recovery system (MACRS) method of depreciation assigns specific types of assets to categories with distinct accelerated depreciation schedules. Furthermore, MACRS is required by

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Free Cash Flow Analysis

See Also: Cash Flow Projections Discounted Cash Flow Analysis Cash Cycle Steps to Track Money In and Out of a Company Free Cash Flow Analysis Definition Free cash flow analysis is the amount of cash that a company can put aside after it has paid all of its expenses at the end of an accounting

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Financing Lease

See Also: The Dilemma of Financing a Start Up Company Lease Agreements Operating Lease Sale-and-Leaseback Lease Term Financing Lease Definition The financing lease definition, also known as a capital lease, is a method of deferred payment. If the lessee is willing to pay the additional cost of interest, then they can use a financing lease

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EBITDA Formula

See Also: Definition of EBITDA EBITDA Valuation EBITDA Formula In order to completely understand the concept of EBITDA, an intelligent idea is to visualize the formula concept. Express the EBITDA calculation formula as follows: EBITDA = Revenues – Costs (excluding interest expenses, taxes, depreciation, and amortization) or, if a person wants to view EBITDA in

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Double-Declining Method Depreciation

See Also: Double-Declining Depreciation Formula Accelerated Method of Depreciation Double-Declining Method Depreciation Straight-Line Depreciation Depreciation GAAP Fixed Assets – NonCurrent Assets Double Declining Depreciation: Definition Double-declining depreciation, defined as an accelerated method of depreciation, is a GAAP approved method for discounting the value of equipment as it ages. It depreciates a tangible asset using twice

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Double-Declining Depreciation Formula

See Also: Double-Declining Method Depreciation Double-Declining Depreciation Formula To implement the double-declining depreciation formula for an Asset you need to know the asset’s purchase price and its useful life. First, Divide “100%” by the number of years in the asset’s useful life, this is your straight-line depreciation rate. Then, multiply that number by 2 and

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