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The formal accounting distinction between on- and off-balance-sheet items can be quite detailed and will depend to some degree on management judgments, but in general terms, an item should appear on the company's balance sheet if it is an asset or liability that the company owns or is legally responsible for; uncertain assets or liabilities ...
The difference between the two valuations is the "value of flexibility" inherent in the project. The two most common tools are Decision Tree Analysis (DTA) [41] and real options valuation (ROV); [53] they may often be used interchangeably: DTA values flexibility by incorporating possible events (or states) and consequent management decisions.
An equitable obligation is a duty based on ethical or moral considerations. A constructive obligation is an obligation that is implied by a set of circumstances in a particular situation, as opposed to a contractually based obligation. The accounting equation relates assets, liabilities, and owner's equity: Assets = Liabilities + Owner's Equity
Capital expenditures are the funds used to acquire or upgrade a company's fixed assets, such as expenditures towards property, plant, or equipment (PP&E). [3] In the case when a capital expenditure constitutes a major financial decision for a company, the expenditure must be formalized at an annual shareholders meeting or a special meeting of the Board of Directors.
In finance, a bond is a type of security under which the issuer owes the holder a debt, and is obliged – depending on the terms – to provide cash flow to the creditor (e.g. repay the principal (i.e. amount borrowed) of the bond at the maturity date and interest (called the coupon) over a specified amount of time. [1])
In financial accounting, a balance sheet (also known as statement of financial position or statement of financial condition) is a summary of the financial balances of an individual or organization, whether it be a sole proprietorship, a business partnership, a corporation, private limited company or other organization such as government or not-for-profit entity.
Rights and Obligations — the transactions and disclosures pertain to the entity. Completeness — all disclosures have been included in the financial statements. Classification — financial statements are clear and appropriately presented. Accuracy and Valuation — information is disclosed at the appropriate amounts.
A fundamental difference between cash accounting and accrual accounting is the treatment of capital, such as equipment, buildings and public infrastructure. [ 7 ] : 105 Under accrual accounting in the public sector, expenditure on capital is not included in net operating expense in the year it is purchased.