Business Report – Qantas Essay
Example: removal of land sale, which would achieve large capital gain I Capitalistic expenses I Process of adding capital expense to balance sheet theta Is regarded as an asset On that It will add to the value of the company and Is therefore recorded on the balance sheet) rather that an expense (in this situation, it would be recorded on the income attempt) Example of capitalizing expenses include: research and development development expenditure I Valuing assets I Process of estimating the market value of assets or liabilities.
The valuations can be used in a variety of contexts for a business, including investment analysis, mergers and acquisitions and financial reporting. 2 Main methods used for valuing assets Include: discounted cash flow method -e stalemates the value of an asset based on expected future scofflaws which are discounted to the parent I. E the present value Guideline company method. This method determines the value of a firm by observing the prices of similar companies guideline copies) the sold in the market. I Timing issues I Financial reports cover activities over a period of time, usually one year.
Therefore, the business’s financial position may not be a true representation If the business has experienced seasons
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