Finance

A financial instrument is a financial contract between two parties. It is a document that represents an asset to one party and liability to another. It carries financial value and represents a binding agreement between two or more parties. It is used by investors to predict future value. Examples of financial instruments are bills of […]

A financial market is an intermediary between the buyer and seller for trading assets like stocks, bonds, derivatives, commodities, and foreign exchange at a determined price. The financial market plays an important role in the economy by allocating limited resources. It helps in the mobilization of savings and determines the price of the securities. It

Introduction Generally, liability is anything that a company or an individual owes to another company or individual. International Financial Reporting Standards (IFRS) Framework defines liability: “A liability is a present obligation arising from past events, the settlement of which is expected to result in an outflow of resources embodying economic benefits.“ Liabilities can be divided

Financial analysis is the process of assessing the company’s performance and making recommendations about how it will perform in the future. Financial analysts, for this purpose, use excel in carrying out their work to analyze historical data and make projections on future performances. There are twelve types of financial analysis, which are extremely important and

Accounting helps organizations to achieve their goals by recording, summarizing, and presenting accurate financial information to its users. The following are the objectives of accounting that demonstrate the importance of accounting systems in any organization. Recording – Reliable accounting record forms the backbone of an accounting information system. The fundamental objective of accounting is to

Introduction Often fair value and market value are used interchangeably and understood as the same thing; however, in reality, they are not identical. There is a difference between these two terms; however, the meanings of these terms may be very similar under some circumstances. To understand the difference between market value and fair value, we

Introduction In the late 1970s, some of you might have read in history books that SEC was dealing with price level accounting and replacement accounting. These experiments died because they did not provide useful information. In theory, current values and fair values are better than historical costs. “Fair value is the price that would be

Fair value and book value are two different methods of valuing a company. While both methods are widely used by investors to value companies for decision-making, both the methods are substantially different in the way they value the company. Therefore, it is important to understand the differences between both methods. Book Value The book value