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A provision is recorded in a liability account, which is typically classified on the balance sheet as a current liability. The accounting staff should regularly review the status of all recognized provisions, to see if they should be adjusted. In American English, the word provision is used as a synonym for “expense”, especially when it […]

Contingency planning is a very important function of the accounting department and financial reporting procedure. And provisions are the essence of contingency planning that help the entities and individuals estimate an expense or loss in anticipation. The IAS 12 of International Financial Reporting Standards defines deferred tax payments as the future expense concerning the Taxable […]

The conversion should normally provide results comparable to those that would have occurred if the business had completed operations using only one currency. Translation losses from the devaluation of foreign currency are not reported with cash and cash equivalents. These losses are reported in the financial reporting account called “accumulated other comprehensive income.” However, if […]

On the other hand, in this example, Tyson Fresh Meats, Inc. has combined cash and cash equivalents in a single item. Working capital is important for funding a business in the short term (12 months or less) and can be used to help finance inventory, operating expenses, and capital purchases. In practice, the cash and cash […]