You sell goods; you issue invoices for those sales and hope for your clients to pay up what they owe to you. If they pay their debt in due time and in full amounts, the payment discipline is generally considered as good. However, once they begin to have overdue balances and problems with meeting the amounts, the payment discipline has changed and for worse. Continue reading
Author Archives: Karl
Inspection of physical assets
The same as you count your inventory; you should also count your fixed assets. I know it may seem odd, they are all there you may say and you can see them, but imagine if you have assets all around your premises and some even in the custody of your employees. How would you then ensure they are all there? Continue reading
If you get services – make sure you’ve got an agreement in place
You get services from someone and you pay them for it. You have a mutual understanding you once agreed in word and it worked out wonderful. You get what you need and your provider gets paid for it. No harm done. Continue reading
Think about termination clauses when signing your contracts
The thing with bad contracts is that first off you should try and avoid signing them. That’s for one and should be quite obvious.
However, how do you assess a contract and whether it’s bad for business or not. Some are easy to detect and negotiate, but some may seem like reasonable demands at the beginning. Continue reading
Investment property – what is it?
No doubt you’ve heard the term “investment property” being mentioned or seen such line items on balance sheet’s of other companies. But what is investment property? Should you have investment property on your balance sheet?
In a nutshell an investment property is property you’re not using in your own business, that’s for one. You’re not using it for your own production, office or whatever similar activities, but rather for renting it out or you’re holding it for future profits (gain in fair value of the property). Continue reading
Disposing assets with a revaluation surplus
You’re using valuation method to account for the cost of your fixed assets and every now and then you need to value your assets up leaving you with a revaluation surplus as a part of the equity.
What happens if you dispose of the asset however? What happens with the revaluation surplus? Regardless of how you’ve decided to treat the surplus while depreciating the asset over it’s use, if you decide to dispose the asset and it has a revaluation surplus remaining on the balance sheet, it needs to be accounted somehow. Continue reading
Depreciating assets with revaluation surplus
So what happens if you have revalued an asset and as a result you now have a revaluation surplus on your statements, namely in equity? What happens with the depreciation of the asset and with this surplus over the period the asset is in use? Continue reading