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Tag: GAAP

Marking to Market

See Also: Dispersion Financial Instruments Basis Definition Basis Points Marking to Market (Financial Derivatives) Marking to market refers to the daily settling of gains and losses due to changes in the market value of the security. For financial derivative instruments, such as futures contracts, use marking to market. If the value of the security goes up

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LIFO vs FIFO

See Also: Inventory Turnover Ratio Analysis Inventory to Working Capital Perpetual Inventory System Just in Time Inventory System Work in Progress LIFO vs FIFO – Last In, First Out vs First In, First Out In the field of accounting, LIFO vs FIFO are two methods of valuing inventory. LIFO assumes the last items acquired are

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Full Disclosure Principle

See also: Accounting Principles 5, 6, and 7 Accrual Based Accounting GAAP Rules Generally Accepted Accounting Principles (GAAP) What is GAAP? Full Disclosure Principle Definition As one of the principles in Generally Accepted Accounting Principles (GAAP), the Full Disclosure Principle definition requires that all situations, circumstances, and events that are relevant to financial statement users

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Financial Accounting Standards Board (FASB)

See Also: International Financial Reporting Standards Financial Ratios Financial Instruments Finance Derivatives Finance Beta Definition FASB Lease Accounting Changes Financial Accounting Standards Board (FASB) Definition The Financial Accounting Standards Board (FASB) is the organization that is responsible for both establishing and interpreting the standards of financial accounting and reporting practices in the U.S. One may

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EBITDA Definition

See Also: EBITDA Definition EBITDA Formula Calculate EBITDA Discounted Cash Flow Analysis Cost of Capital Funding Capital Asset Pricing Model Discount Rates NPV Adjusted EBITDA EBITDA Definition | What is EBITDA? The EBITDA definition is earnings before interest, taxes, depreciation, and amortization. It measures a company’s financial performance by computing earnings from core business operations,

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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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Controller Duties

See Also: Controller Definition Controller Separation Of Duties Controller Vs Comptroller Duties Of A Financial Controller Controller Vs. CFO Financial Controller Duties The duties of a financial controller are to oversee the accounting functions within an organization and internal controls at the highest level of management. Financial controller responsibilities are to work alongside the executive

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Capital Lease Agreement

See Also: Fixed Assets Current Liabilities Long Term Debt Sale and Leaseback Working Capital Secured Claim Capital Lease Agreement A capital lease is a type of long-term lease agreement. A capital lease is recorded on the lessee’s balance sheet. This type of lease typically spans most of the useful life of the asset. In a

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Auditor

Auditor Explanation In accounting, an auditor is a certified public accountant (CPA) who performs an objective examination of a company’s financial statements and internal controls. They evaluate the validity and reliability of the data and confirms whether the financial statements were prepared in accordance with the rules of GAAP. Furthermore, there are two types: an internal

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C Corporation

See Also: S Corporation Limited Liability Limited Partnership (LLLP) Cooperative (co-op) Limited Liability Company (LLC) Sole Proprietorship S Corporation vs C Corporation Conglomerate Definition C Corporation Definition The C Corporation definition (C-corp) is a form of business which is owned by several C-corp shareholders or holders of stock within the company. Many larger businesses adopt

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Amortization

In accounting, amortization refers to the periodic expensing of the value of an intangible asset. Similar to depreciation of tangible assets, intangible assets are typically expensed over the course of the asset’s useful life. It represents reduction in value of the intangible asset due to usage or obsolescence. Basically, intangible assets decrease in value over time, and amortization

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Disclosure of Accounting Changes

See Also: Accounting Principles Probable Losses Subsequent Events Business Segments How to Make Dramatic Changes in Business Planning Your Exit Strategy Percentage Completion Method What Your Banker Wants You To Know Accounting Changes Explanation Accounting changes and error corrections are the switch from one principle of accounting to another – like with inventory and recognition

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