Author Archives: Karl

Which method for presenting current and non-current positions to choose?

You know that you have to make a distinction of current and non-current on your balance sheet, but which method to choose. See also our post regarding the two methods being described in “Distinction of current and non-current on statement of financial position”.

Now when it comes to choosing the method, above all you must remember that the method you opt for, needs to present information in a most reliable and relevant manner as compared to the other option. It’s not just what you like but how it presents information to the users of the financial information.  Continue reading →

Distinction of current and non-current on statement of financial position

First lets agree that the “statement of financial position” you may have heard or read about is something we also like to call “balance sheet” from time to time. Regardless of how you name it though, it still includes your company’s assets, liabilities and equity balances. Name does not change the contents.  Continue reading →

Stage of completion – expenses exceed budgeted expenses

What happens if the expenses you budgeted are overrun and the agreement and transaction therein ends in a loss for your company?

Financial performance wise obviously you may see a way to change something within the transaction and service – materials to be used, less personnel, more effective approach and what not – that would be trying to achieve the goal.  Continue reading →

Accounting when using stage of completion for accounting revenue

Determining the stage or percentage of the transaction and how much of it is complete and what remains to be completed is one thing. It’s another, although not completely unrelated, to record the transactions in accounting. Under “transactions” I mean not only the revenue, but also receivables and liabilities.

The initial basis for any accounting record is usually either an agreement or an invoice. When performing services over a longer period and using stage of completion, you’re most likely bound to an agreement. This agreement defines the services, quantitative aspects if applicable and what’s more, it also sets out the payment schedule and if any conditions are related to those invoices.  Continue reading →

Sales returns

In some cases it may be so that you’ve decided to give your clients the right to return either defected or not needed goods or even more regardless of the reason, they have the right to return the goods without questions asked. It’s not only the right to return goods, but also claim what they paid or not pay what they owe.  Continue reading →

Accounting entries for sales tax

When affected by sales tax, you on one hand must keep in mind that the tax is not part of your revenue. On the other hand you still must treat the tax on your statements.

It’s one thing declaring the tax – there are declarations, forms etc. applicable in your country and subject to local guidance. Each country has its own specific regulations for which we suggest you consult your local advisor or legislation yourself.  Continue reading →