Basic concepts on financial statements analysis (2014)

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Universidad Universidad Pompeu Fabra (UPF)
Grado International Business Economics - 2º curso
Asignatura Financial Statements Analysis
Año del apunte 2014
Páginas 1
Fecha de subida 22/06/2014
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Financial Statement Analysis CONCEPTS TOPIC 2 Book Value Accumulated Depreciation Goodwill Prepaid Expenses Deferred Changes Accrued assets In accounting, book value or carrying value is the value of an asset according to its balance sheet account balance.
For assets, the value is based on the original cost of the asset less any depreciation, amortization or Impairment costs made against the asset.
The decrease in value of assets. While depreciation expense is recorded on the income statement of a business, its impact is generally recorded in a separate account and disclosed on the balance sheet as accumulated depreciation, under fixed assets, according to most accounting principles.
Is an accounting concept meaning the value of an asset owned that is intangible but has a quantifiable "prudent value" in a business for example a reputation the firm enjoyed with its clients.
Is an asset representing cash paid out to a counterpart for goods or services to be received in a later accounting period. For example if a service contract is paid quarterly in advance, at the end of the first month of the period two months remain as a deferred expense. In the deferred expense the early payment is accompanied by a related recognized expense in the subsequent accounting period, and the same amount is deducted from the prepayment.
Cost that is accounted-for in the future (and not in the accounting period in which it is incurred) because of its anticipated future benefit, or to comply with the requirement of matching costs with revenues. Deferred charges include start up costs, financing costs for longterm debt, costs of advertising campaigns, etc., and are carried as a non-current asset on the balance sheet pending amortization. in contrast to prepaid expenses (such as insurance, interest, rent) deferred charges usually extend over a long period (often five years or more) and occur infrequently.
Earned but yet unrealized asset, such as accrued income.
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