Dividend income is recognized in the financial statements when the right to receive payment is established. The right to receive payment is established when the company has declared the dividend and the shareholders have the right to receive payment. The amount of the dividend income is usually determined by the number of shares held by […]

Development costs are costs incurred by an entity in the process of creating an intangible asset, such as software development, product design, and research and development. According to accounting standards, development costs are recognized as an asset only when the following conditions are met: Once these conditions are met, the development costs should be capitalized

Agricultural products are usually accounted for under the accrual accounting method, where revenues are recognized when earned and expenses are recognized when incurred, regardless of when the cash is received or disbursed. For example, when crops are grown, the costs incurred are recorded as expenses, and when the crops are sold, the revenue is recognized.

The disposal of a subsidiary is a significant event for a company, and as such, requires a careful and thorough audit approach. This article will cover the accounting treatment, audit risks, audit assertions, walkthrough testing, a test of control, and substantive audit procedures for auditing a subsidiary’s disposal. Accounting Treatment: The disposal of a subsidiary

Deferred revenue, also known as unearned revenue, refers to the amount received by an entity in advance for goods or services that have not yet been delivered. It is recognized as a liability in the balance sheet until the goods or services are delivered. In accordance with International Financial Reporting Standards (IFRS), deferred revenue is

Deferred tax is a liability that arises due to the difference between the financial reporting tax base and the tax base used for tax purposes. The purpose of deferred tax is to ensure that the company’s taxable income in a future period matches its taxable income for the current period. Deferred tax is recorded as

Deposits are one of the most important liabilities that a business holds and they require a comprehensive auditing procedure to ensure their accuracy and completeness. In this article, we will discuss the accounting treatment, audit risks, audit assertions, walkthrough testing, a test of control, and substantive audit procedures for deposits. Accounting Treatment Deposits are generally

Contingent liabilities refer to potential obligations that may or may not arise depending on the outcome of future events. These types of liabilities can include lawsuits, guarantees, warranties, and other commitments. When auditing contingent liabilities, it is important to consider both the accounting treatment and potential audit risks, as well as to perform appropriate audit

Accounting Treatment: Current assets, including cash and cash equivalents, short-term investments, accounts receivable, inventories, and other current assets, are typically considered a company’s most liquid assets. The accounting treatment for these assets involves the proper classification and accurate measurement of the assets on the balance sheet. Audit Risks: The following are the top audit risks

The audit of cash and bank balances is a critical component of a financial audit, as it helps to ensure the accuracy and reliability of a company’s financial statements. In this article, we will cover the accounting treatment, audit risks, audit assertions, and audit procedures for auditing cash and bank balances. Accounting Treatment: Cash and