A comprehensive document detailing a business's accounting policies and procedures, often including account codes and a chart of accounts. Key aspects include methods for treating depreciation and other asset-related processes.
Understanding the multifaceted term 'capitalize' and the concept of capitalization, especially within various business and financial contexts. This includes asset valuation, financing capital expenditures, accounting procedures, and making economically advantageous decisions.
Consistency refers to the use of the same accounting procedures by an accounting entity from period to period. Consistently applying similar measurement concepts and procedures for related items within the company's financial statements across different periods simplifies comparisons and projections.
A nonrecurring charge is a one-time expense or write-off that appears in a company's financial statement. It is also called an extraordinary charge. This term includes unexpected events such as natural disasters, strategic business decisions like closing a division, or changes in accounting procedures.
Normative theories of accounting prescribe the accounting procedures and policies that should be followed, often based on a priori concepts and deductive reasoning, as opposed to those that are actually followed in practice.
