Financial Statements & Accounting
55 terms · page 1 of 3
Accrual Accounting
The convention of recording revenue when it is earned and expenses when they are incurred, regardless of when cash moves.
Financial Statements & AccountingAmortisation
The systematic write-off of an intangible asset's cost over its useful life, the intangible equivalent of depreciation.
Financial Statements & AccountingAuditor's Report
The statutory auditor's formal opinion on whether the financial statements give a true and fair view in accordance with the applicable…
Financial Statements & AccountingBalance Sheet
A statement of what a company owns and owes at a single point in time, with the two sides always equal.
Financial Statements & AccountingBook Value
The accounting value of a company's equity, equal to total assets less total liabilities.
Financial Statements & AccountingCapital Expenditure
Spending on acquiring or improving long-lived assets, recorded on the balance sheet and expensed over time through depreciation.
Financial Statements & AccountingCapital Work in Progress
Expenditure on assets still under construction, held on the balance sheet until the asset is ready for use.
Financial Statements & AccountingCash and Cash Equivalents
Cash on hand, bank balances and short-term highly liquid investments readily convertible to a known amount of cash.
Financial Statements & AccountingCash Flow Statement
A statement reconciling the change in a company's cash balance over a period, split into operating, investing and financing activities.
Financial Statements & AccountingConsolidated Financial Statements
Accounts that combine the parent company and all its subsidiaries as if they were a single economic entity.
Financial Statements & AccountingContingent Liability
A possible obligation whose existence depends on an uncertain future event, disclosed in the notes rather than recognised on the balance…
Financial Statements & AccountingCost of Goods Sold
The direct cost of producing the goods or services actually sold during a period, principally materials and direct labour.
Financial Statements & AccountingCurrent Assets
Assets expected to be converted to cash, sold or consumed within twelve months or one operating cycle.
Financial Statements & AccountingCurrent Liabilities
Obligations a company must settle within twelve months, including trade payables, short-term borrowings and accrued expenses.
Financial Statements & AccountingDeferred Tax
The tax effect of timing differences between how items are treated in the accounts and how they are treated for tax purposes.
Financial Statements & AccountingDepreciation
The systematic allocation of a tangible asset's cost over its useful life as an expense in each period.
Financial Statements & AccountingEBITDA
Earnings before interest, tax, depreciation and amortisation — a measure of operating profit that ignores capital structure and asset…
Financial Statements & AccountingExceptional Item
A gain or loss that is material and outside the ordinary course of business, disclosed separately so that underlying performance stays…
Financial Statements & AccountingFinancing Cash Flow
The net cash raised from or returned to providers of capital through borrowing, share issues, dividends and buybacks.
Financial Statements & AccountingFree Cash Flow
The cash a business generates after funding the capital expenditure needed to maintain and grow its asset base.
Financial Statements & AccountingGoodwill
The excess of the price paid for a business over the fair value of its identifiable net assets, recorded as an asset on acquisition.
Financial Statements & AccountingGross Profit
Revenue less the direct cost of the goods or services sold, before operating, financing and tax costs.
Financial Statements & AccountingIntangible Assets
Identifiable non-physical assets such as software, patents, licences and trademarks that are expected to generate future benefits.
Financial Statements & AccountingInterest Expense
The cost of borrowed money charged to the profit and loss statement for a period.