Financial companies tend to offer their clients, as part of their retirement solutions portfolio, the opportunity of receiving two types of payments once their contracts are due. They can either take a lump sum payment or they can agree to receive a certain number (sometimes unlimited number) of subsequent payments as part of the distribution ... Read more
The post Annuity vs Lump Sum appeared first on My Accounting Course.
What is a Company Acquisition? An acquisition is a type of corporate transaction in which a company takes over another entity and establishes itself as its new owner. It is a growth strategy that aims to achieve results in the short-term by purchasing businesses that are already well-positioned in their respective markers or fields. An ... Read more
The post Acquisition appeared first on My Accounting Course.
What is Acquisition Premium? The acquisition premium, also known as the takeover premium, is the difference between the actual price paid for a target company during a merger or acquisition based on its pre-merger value. A premium is commonly paid if the acquirer has identified potential synergies resulting from the transaction that will offset the ... Read more
The post Acquisition Premium (Takeover Premium) appeared first on My Accounting Course.
Acquisitions have the objective of improving the financials of the acquirer, usually in within a long-term perspective. Companies look for quick growth, cost savings, synergies, and larger size when embarking into an acquisition process. This kind of transaction occurs every day in all continents and helps businesses in becoming more efficient and dynamic. Below, there ... Read more
The post Company Acquisition Examples appeared first on My Accounting Course.
Accrual and deferral are two accounting techniques that intend to improve the accuracy of financial reports by incorporating revenues and expenses that have not yet occurred or that will occur in the near future. Their main goal is to increase the precision of financial reports by providing a more realistic picture of the organization’s financial ... Read more
The post Accrual vs Deferral appeared first on My Accounting Course.
What is an Inventory Purchase Journal Entry? An inventory purchase journal entry records the acquisition of goods that a business intends to sell. This entry typically involves debiting the Inventory account to increase the company’s assets, showing that inventory has been added to the stock. Concurrently, the Cash account is credited if the purchase is ... Read more
The post Inventory Purchase Journal Entry appeared first on My Accounting Course.
What is a Sales Revenue Journal Entry? A sales revenue journal entry is an accounting entry recorded in the financial ledgers of a company to document the income generated from the sale of goods or services before any deductions, like returns or discounts. This entry is crucial for capturing the essence of business transactions related ... Read more
The post Sales Revenue Journal Entry appeared first on My Accounting Course.
Definition: A valuation allowance is an accounting reserve (contra account) set against deferred tax assets to ensure that their value on the balance sheet accurately reflects the amount that is more likely than not to be realized. It acts as a safeguard, adjusting the deferred tax assets to a level that can be substantiated by ... Read more
The post What is Valuation Allowance? appeared first on My Accounting Course.
Definition: Round-trip transactions refer to a series of transactions where a company sells an asset and then repurchases the same or similar asset, often at a similar price and within a short time frame. These transactions can artificially inflate a company’s revenue and trading volume, creating a misleading impression of its financial activity and health. ... Read more
The post What are Round-Trip Transactions? appeared first on My Accounting Course.