What are some types of divestitures?

Q: What is the purpose of valuation in terms of voluntary assessment?

A: Every organization needs to know the worth value of its assets, business or company.  In other words…

Q: What can be understood by abnormal return?

A: Note firstly we understand what is meaning of abnormal return. Basic meaning of abnormal return is…

Q: What is the dual purpose of the closing process?

A: The closing entries enable the company to transfer the balances out of certain temporary accounts…

Q: When is consolidation not required?

A: Consolidation is the process of consolidating the financial statements of the investee which it…

Q: what is disinvestment ?

A: Disinvestment:  Disinvestment means selling off the assets such as manufacturing plant, a division,…

Q: Define the term depreciation recapture?

A: Depreciation recapture is the earnings acknowledged by the offer of depreciable capital assets that…

Q: Which decision is called the abandonment decision?

A: Answer: The decisions relating to the company that provides flexibility to discontinue the project…

Q: How does the change in the PBO occur?

A: Projected Benefit Obligation:   It is a pension concept in accounting as it is the present value of…

Q: What are some motives for divestitures?

A: The question is based on the concept of divestiture strategy, which is used by company to overcome…

Q: What is nonoperating assets?

A: Non-operating assets are the assets that are not required or in use for normal business activity.…

Q: Explain Disposition Decisions?

A: Patients' having the option to see through to their last disposition can be an overwhelming capacity…

Q: Define the term Loss Contingencies.

A: A loss contingency is incurred by the business based on the result of a future event, such as…

Q: Define Loss contingency.

A: A loss contingency gives the reader of the financial statements early warning of an impending…

Q: What does the elimination process accomplish?

A: Intercompany elimination:   Intercompany elimination refers to the process in which the transactions…

Q: What are the Differences in Maturities?

A: Maturities in the context of the bond mean that bonds are issued for a specific period of time. It…

Q: What is securitization?

A: Introduction: Finance reflects a broad variety of spaces where decisions can be taken relative to…

Q: What kind of acquisition is it?

A: Mckinsey divided the types of acquisition based on the purpose of such acquisition. 'Acquisition for…

Q: What is the closing process?

A: Closing Process: Closing process is a process which consists of journalizes the closing entries of…

Q: When is a GAAP departure appropriate?

A: Definition:   Generally Accepted Accounting Principles (GAAP): These are the guidelines necessary to…

Q: Determine the theoretical ex-rights price?

A: The determination of the theoretical ex-rights price is generally done when stocks are issued and…

Q: Define and discuss survivorship bias and selection bias, and how they affect reported returns of…

A: Survivorship bias is a type of bias in which a person has a tendency to view the performance of…

Q: What is an Acquisition costs?

A:

Q: What are the Replacement-Analysis Fundamentals?

A: Replacement analysis refers to the process where an organization determines whether it is beneficial…

Q: What are reversing entries? Are they required by GAAP?

A:

Q: How do fixed asset systems differ from purchases systems?

A: Definition: Purchase system: The identification and procurement of the inventory needs for the…

Q: What is the meaning of valuation?

A: Valuation simply refers to the process of ascertainment of the worth of any thing, it can be worth…

Q: why would using a single WACC not be appropriate for valuing an LBO?

A: Leveraged Buyout (LBO) It is an acquisition in which the primary source of consideration is debt.…

Q: When are loss contingencies recorded?

A: Definition:   Contingent liability: This is an uncertain obligation which might be incurred on a…

Q: what is pooling of Interest Method?

A: The accounting method that governed how the balance sheets of two companies that were merged would…

Q: What features or rights may alter the character of preferredstock?

A: Preferred stock is the stock which gets preferential rghts to payment of  dividends and in case of…

Q: What is breakup value?

A: Answer: Break-up value is nothing but a valuation that suggests the business will be split into…

Q: What is eviction?

A: Eviction as per law is the process of civil nature in which court allows landlord to legally remove…

Q: What is the discounting process?

A: Discounting: It is the process where the bill is given to a bank to get the bill discounted before…

Q: Explain the Redemption process?

A: The question is based on the concept of redemption, which is mainly used for repayment of fixed…

Q: When should the defender be replaced?

A: When should the defender be replaced?

Q: Why does the so-called distressed property situation exist?

A: Distressed property refers to those which have value less than the market value. This situation…

Q: What does Unbundling entail reducing?

A: Unbundling is the process of selling, changing, or cutting assets, product lines, divisions, or…

Q: Define devaluation

A: Currency- Currency is defined as money in terms of paper or coins which is issued by the government.…

Q: Explain The Auction Process?

A: An auction is the place or thing where potential buyers and seller gather to publicly bid for the…

Q: Methods and rules to be followed in case of reconstitution?

A: Solution- It is often noticed that a partnership firm undergoes restructuring. These changes are…

Q: Define divestiture

A: Introduction: A divestiture might happen when a business unit is thought to be redundant afterward…

Q: What is loss aversion?

A: What is loss aversion?

Q: Identify and briefly explain the four types of divestitures.

A: Following are the 4 kinds of divestitures: Strategic Buyers: We are either vertically or on a level…

Q: Distinguish between participating or nonparticipating?

A:

Q: What are some advantages of asset allocation?

A: The advantages of applying asset allocation:   Diversification:  Long-term investing:…

Q: What is the definition of “retrospective application”?

A: The first book that the company will prepare is the journal book in which all the transactions of…

Q: Define Securitization.

A:

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.