As a real-world example, here is some information from Johnson & Johnson’s 2014 year-end balance sheet. The company has 4.32 billion authorized common shares, of which 3,119,843,000 have been issued as of December 31, 2014. When a company executes a stock split, the number of outstanding shares rises. Stock splits are often initiated to lower […]

FRSs and SSAPs are as capable of being wrong as any other artefact of human intelligence. They only acquire binding force if and when they are approved by a court, and even judges get things wrong sometimes which is why we have an appeals system. In a democracy it is disastrous if people feel they […]

The gross income from fundraising events must be reported in the right-hand column on line 6b without reduction for cash or noncash prizes, cost of goods sold, compensation, fees, or other expenses. Fundraising events and activities raise funds by offering goods or services that have more than a nominal or insubstantial value (compared to the […]

Regardless of how the accounting equation is represented, it is important to remember that the equation must always balance. Receivables arise when a company provides a service or sells a product to someone on credit. An asset is a resource that is owned or controlled by the company to be used for future benefits. Impact […]