The Differences Between Conclusion of Value and Calculation of Value
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When a business is looking for a valuation, it needs to decide whether to use the calculation of value approach versus the conclusion of value option. The conclusion of value calculation is a more rigorous and resource-intensive calculation of value. Both approaches are similarly dependable, and despite the calculation of value’s less in-depth approach, business […]
Liquidation Value Versus Going-Concern Value
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Whether it’s a company firing on all cylinders or a company on the verge of liquidation, determining correct valuations is not a cut-and-dry process. Understanding the importance of going-concern values and liquidation values is essential when determining a business’ worth. Quantifying Going-Concern Value When it comes to defining this type of value, it factors in […]
Working Capital and the Role it Plays in Your Business’ Success
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The accounting term working capital is essential knowledge for all business owners. Basically, it is the ability of a business to meet its ongoing obligations. Learning about some of the different aspects of working capital is vital for any successful business owner. Net operating working capital (NOWC) is the gap between a business’ current assets […]
Taking a Closer Look at Trial Balances
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A trial balance is an accounting tool that helps businesses determine if the double entry accounting system has any mathematical errors. Once the trial balance is worked through, and the total debits and total credits equal each other, we know there are no mathematical errors – but that doesn’t mean it is error free. It […]
Contingent Liability Defined
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As the name implies, a contingent liability for a business does not always happen and depends on how the future unfolds. When it comes to a business analyzing a contingent liability, it focuses on the probability of the business realizing it, the time frame within which the liability might occur, and the accuracy of the […]
Optimizing Your Business’ Performance with Capacity Management
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When it comes to business operations and measuring performance, the optimal production scale a company can sustain is an important metric to measure. If a business’ capacity can’t be realized and sustained – or the bottlenecks can’t be identified and addressed in a timely manner – a business will likely stagnate and fail. Understanding more […]
Defining Materiality in Accounting
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In the world of accounting and auditing, there is a concept called materiality. The term materiality essentially means an amount that if erroneously omitted or included impacts the financials of a company to the point where they don’t tell the truth. One very basic example would be if a $1 million revenue small business made a mistake recording their accounts […]
How the 2022 Consolidated Appropriations Act Impacted Accounting in 2023
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According to the Centers for Medicare & Medicaid Services’ report “Advancing Rural Health Equity,” the 2022 Consolidated Appropriations Act (CAA) maintained telehealth options due to the Covid-19 Public Health Emergency (PHE) order for 151 more days beyond the original expiration of the Covid-19 PHE. Medicare recipients will benefit from the extension of telehealth services. This […]
Understanding Operating and Capital Leases
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The first thing to define is what a lease itself is. It’s an agreement or contract where one party, the lessor, allows another individual or business, the lessee, to use their asset in return for payments or different assets. The next step is to define the following types of leases. The two types covered in […]
Understanding Mark-to-Market
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The term mark-to-market is an important phrase in corporate finance that has many nuances and industry-specific uses. Mark-to-market is a corporate finance term that provides businesses with a way to evaluate a holding’s fair value for both assets and liabilities. Since values can change over time, this gives a rational assessment of a business’ present […]