Meaning of Financial Statement Meaning of Financial Statement : Financial statements are summarised reports prepared by a company’s management to present the financial performance and position at a point in time. The detailed information contained therein is useful for assessing the operational efficiency and financial soundness of a company. Financial statements generally include balance sheets, … Read more
Limitations of Financial Statements: Financial statements are prepared with extreme caution but still there are certain limitations which are bound to creep in these statements. Some of the limitations of financial statements are mentioned below – Historical Costs: Current price changes are not taken into account as the financial statements are prepared on the basis … Read more
Uses and Importance of Financial Statements Financial Statements of the Company present the overall financial position/ performance of the company to its owners and the external parties. They not only help the management in planning and decision making but also serve as a great source of updating the other stakeholders who are interested in the … Read more
A company does not exist just by itself. Not only the owners but also various other stakeholders are interested in the functioning and performance of the company. This necessitates the preparation of financial statements so as to convey the financial information to its owners and external parties conveniently. These financial statements are the summarised end … Read more
Financial statements are prepared by a company at the end of the year to ascertain the financial position and profitability of the business and to convey the same to the owners and other stakeholders for their understanding. The primary objective of preparing the financial statements is to help in better decision making. Some of the … Read more
Meaning of Financial Statements – Financial Statements are the records of the financial position of a company. It is prepared by the management of the company with a view to present the financial performance of the business conducted by them to the owners and the external parties. The external parties are the parties who are … Read more
Meaning of Redemption of Debentures Redemption of debentures means repayment of debenture to the debenture holders by the company after a specified period of time. Debenture is a liability to the company so when the company redeems the debentures, the liability of the company is being reduced. Debentures can be : – Issued either at … Read more
Writing off Discount/Loss on Issue of Debentures: When debentures are issued at a discount or any Loss on issue of debentures arises, it is required to be written off during the year in which such issue is made. It is a capital loss in nature. The securities premium reserve available can be used to write … Read more
Debentures are an instrument, an acknowledgement of debt, issued under the common seal of the company which is duly signed by authorized signatory and is an agreement for the repayment of principal sum and interest at a specified rate on a specified date. They are categorised as the liability of the company. With respect to … Read more
Terms of Issue of Debentures – At the time of issue of debentures, the terms on which they are issued and will be redeemed are specified. These terms of issue of debentures and other conditions could result in six different kinds of situations. These are – Issue at par and redemption at par Issue at … Read more