Peter Oduro -Financial Accounting Professional, Tax Expert

12/04/2021

Date: Saturday November 27, 2021

Accounting

The 6 Key Elements Business Owners Need to Know About Financial Statements.

Accounting language is the language used by the Securities Exchange Commission (SEC) to evaluate the Financials of the Capital Markets –the Stock Exchange.
These are essential for the compliance of all Financial Statements – Financial Reports.
The elements are

1)ASSETS:
These are items of Economic benefits that are expected to yield (or produce further benefits) in the future periods.
In essence, they are economic resources that are available to the company.

The Categories of these assets are:
Current Assets
 Cash/ or Cash in Bank.
 Investments
 Inventory
 Accounts Receivable (AR).

Fixed Assets
 Land.
 Building
 Equipment -Computer, Laptops, Printers.
 Tools

2)Liabilities:
These are legally binding obligations payable to another entity or individual.
The Categories of these assets are/or this have two parts:
Short-Term Liabilities
 Salary Payable (Employees Pay)
 Taxes Payable
 Accounts Payable (short-term)

Long-Term Liabilities
 Mortgages
 Capitalization

3)Equity:
Equities are the Contributed Funds put in to start the business by the Owner/ or Owners/ or Shareholders (Investments into).
Money owed to the owners is called the Retained Earnings (R/E)
The Categories of these assets are:

Contributed by Owners/Shareholders
Contributed Funds is called
Contributed CAPITAL

Equity Owned to Owner (s)
Owed to Owners = R/E

4)Revenue:
This reflects all the Company’s Income for a specified period (one Year = Current Fiscal Year or Q1, Q2, Q3, or Q4)

5)Expenses:
These reflect all the costs, that a company must pay OUT.
They are like Revenue; they include only the portion for the current specified time frame period (that is the current Fiscal Year).

For a more comprehensive Financial Reporting, or on Consolidated Financial Reports (International Entities, Listed Companies), the Financial Accounting Standards Board (FASB) stresses the need to include some other three (3) Elements to bring more clarity and shed light on the Financial Reports. These are: i) Investments by Owners (In the Associate/ or Investee’s Corporation or Company – 20% Interest or 50% Interest invested); ii) Distribution to Owners; and iii) Comprehensive Income.

6)Investments b Owners:
The Investee’s/or ASSOCIATE reports this on Financial Statements.
The Investor Company also reports on Financial Reports.

7)Distribution to Owners/Shareholders:
Funds paid out or distributed to Shareholders need to be reported on Financial Reports.

8)Comprehensive Income:
These includes: Net Income and Unrealized Income (aka Unearned Income). Examples are:
 Unrealized GAINS,
 Unrealized Loses, like on Hedge Funds/ and or on Derivatives (ex: OPTIONS –CALL Options & PUT Options).
 Financial Investment LOSES.
 Foreign Currency Transaction GAIINS.
 Foreign Currency Transaction LOSES.
Please Note:
There are some companies that choose to hide this element, or at least, keep it outside the Financial Reports (called OFF the Balance Sheet Account).
Financial Accounting Standard Board (FASB) stresses the urgent need to present this on the Financial Reports to clearly capture the Financial position of the Entity. This also helps potential Investors to evaluate, with confidence, the Financials of the Company (with Debt or no Debt).

These provide a HOLISTIC view of a Company’s Income, which is sometimes not FULLY captured on the Financial Statements or by the Reports.

Capitalization:
If the Asset in question will have a Useful Life that is greater than one year, and the cost of the Asset is above, such a threshold that is set by the Company/ or Business, then it must be Capitalized.
Examples:
 Trademarks.
 Software Development (costs).
 Costs oof Filing and Defending Patents.
These are capitalization of Intangible Costs – an OUTLAY of money to pay for a specific Asset.

On the other hand, if the company cannot determine/ or demonstrate a clear link between COSTS and Future Revenue , then such cost (which are expenses) must be expensed immediately.
Thus, this will come under Expenses, as above stated.

Peter Oduro
Is the President/Owner of UNI-SOURCE FINANCIAL SERVICES LTD.
Financial Accounting Services/Bookkeeping/Tax Services/ Tax Planning for Businesses
Email: [email protected]
Email: [email protected]
LinkedIn
Twitter Handle:
Website: https://unisourcefinancialservicesltd.business.site/?m=true

12/03/2021

Bookkeeping Service in Kitchener

11/19/2021

Date: Friday, November 12, 2021
The Customary Function of the Financial Reporting
International Financial Reporting Standards (IFRS)

Rapid advances in Information Technology, Telephony, Telecommunication, Digital Technology, and all have improved communication, which has led to reduction in transaction cost, increase in ancillary supplies, and increase in other economies of scale.
This has propelled and fueled the growth and increased the number of companies, trading and doing Business, across International geographical boundaries.
Globalization is now the new normal of doing business, trading, and commerce of production, and distribution of products to end-user (the costumers, consumers) across international boundaries.
And as Economic Development is moving so rapidly across the globe, there are three essential –elements—ingredients that propels, or drives growth:
Productivity, Capital, and Labour. These factors fuels growth. Currently (COVID -19 Pandemic times) all these three factors are facing new changes, and challenges.
Productivity is the main long-term propeller of economic growth.
The Labour Markets landscape is changing. Technology(AI, Machine Learning, Robotics, Digitalization) is having profound effect on labour market. Robotics, Digitalization, and Automation are shifting the Demand for Labor away from the Low middle skills to higher level advanced skills, and more sophisticated, technical, analytical, managerial, and even Statistical skills.

As the world embrace these disruptions and changes, the Global Economy will grow. Many Companies will be developed, and all will be adopting to rule-based International Financial Reporting and Global Accounting Standards.
Adoption of Financial Reporting Standards on Global Stage:
Many countries now have adopted International Financial Reporting Standards (IFRSs).
The performance of the Capital/Securities Markets relies on the Integrity of the Market Information, its accuracy, and Accounting Information-and Accounting language is a piece of this.
International Markets and Finance are becoming more and more efficient, and sophisticated, and as rent seekers, Investors seek opportunities of higher rates of returns in Markets—Investment Capital move from Markets with lower rates of returns to markets with higher rates of returns.
Here we see Accounting Information is used in analyzing (Fundamentals: Income Statement, Consolidated Balance Sheet, Cash Flow Reports, Key Performance Index (KPI), Earnings per Share (EPS), Price to Earnings Ratio P/E, Projected Earnings Growth (PEG)) and assessing the growth and viability, Profitability, and decision making of Investing. Thus, Accounting Information is used in making decisions of Investing in Emerging Economies, New Start-ups, New Industries, and Developing Economy Countries.
It is imperative, and indeed, ethical, that these countries, receiving these potential Investments, provide, and ensure that reliable and accurate Accounting Information (of such Traded Companies) are supplied to potential Investors.
Hence, the need for International Financial Reporting Standards (IFRSs), and Market Compliance Organizations, like the International Organization of Securities Commission (IOSCO).

Peter Oduro
Is the President/Owner of UNI-SOURCE FINANCIAL SERVICES LTD.
Financial Accounting Services/Bookkeeping/Tax Services/ Tax Planning for Businesses
Email: [email protected]
Email: [email protected]
LinkedIn
Twitter Handle:
Website: https://unisourcefinancialservicesltd.business.site/?m=true
Date: Friday, November 12, 2021
The Customary Function of the Financial Reporting
International Financial Reporting Standards (IFRS)

Rapid advances in Information Technology, Telephony, Telecommunication, Digital Technology, and all have improved communication, which has led to reduction in transaction cost, increase in ancillary supplies, and increase in other economies of scale.
This has propelled and fueled the growth and increased the number of companies, trading and doing Business, across International geographical boundaries.
Globalization is now the new normal of doing business, trading, and commerce of production, and distribution of products to end-user (the costumers, consumers) across international boundaries.
And as Economic Development is moving so rapidly across the globe, there are three essential –elements—ingredients that propels, or drives growth:
Productivity, Capital, and Labour. These factors fuels growth. Currently (COVID -19 Pandemic times) all these three factors are facing new changes, and challenges.
Productivity is the main long-term propeller of economic growth.
The Labour Markets landscape is changing. Technology(AI, Machine Learning, Robotics, Digitalization) is having profound effect on labour market. Robotics, Digitalization, and Automation are shifting the Demand for Labor away from the Low middle skills to higher level advanced skills, and more sophisticated, technical, analytical, managerial, and even Statistical skills.

As the world embrace these disruptions and changes, the Global Economy will grow. Many Companies will be developed, and all will be adopting to rule-based International Financial Reporting and Global Accounting Standards.
Adoption of Financial Reporting Standards on Global Stage:
Many countries now have adopted International Financial Reporting Standards (IFRSs).
The performance of the Capital/Securities Markets relies on the Integrity of the Market Information, its accuracy, and Accounting Information-and Accounting language is a piece of this.
International Markets and Finance are becoming more and more efficient, and sophisticated, and as rent seekers, Investors seek opportunities of higher rates of returns in Markets—Investment Capital move from Markets with lower rates of returns to markets with higher rates of returns.
Here we see Accounting Information is used in analyzing (Fundamentals: Income Statement, Consolidated Balance Sheet, Cash Flow Reports, Key Performance Index (KPI), Earnings per Share (EPS), Price to Earnings Ratio P/E, Projected Earnings Growth (PEG)) and assessing the growth and viability, Profitability, and decision making of Investing. Thus, Accounting Information is used in making decisions of Investing in Emerging Economies, New Start-ups, New Industries, and Developing Economy Countries.
It is imperative, and indeed, ethical, that these countries, receiving these potential Investments, provide, and ensure that reliable and accurate Accounting Information (of such Traded Companies) are supplied to potential Investors.
Hence, the need for International Financial Reporting Standards (IFRSs), and Market Compliance Organizations, like the International Organization of Securities Commission (IOSCO).

Peter Oduro
Is the President/Owner of UNI-SOURCE FINANCIAL SERVICES LTD.
Financial Accounting Services/Bookkeeping/Tax Services/ Tax Planning for Businesses
Email: [email protected]
Email: [email protected]
LinkedIn
Twitter Handle:
Website: https://unisourcefinancialservicesltd.business.site/?m=true

Bookkeeping Service in Kitchener

11/19/2021

08/23/2019

Guaranteed Investment Fund (GIF)

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