Key Difference – Combined vs Consolidated Financial Statements As companies pursue expansion strategies, they may acquire controlling or non-controlling stakes in other companies. This is done in order to gain access to new opportunities, obtain synergies and enter into otherwise restricted markets. (Some countries do not allow overseas companies to start businesses without a […]
Difference Between Current and Long Term Liabilities
Key Different – Current vs Long Term Liabilities Liabilities in a business arises due to owing funds to parties outside the company. This is a legal obligation the company is bound to fulfil in the future. Liabilities arise from the debt taken, and the nature of debt is dependent on the requirement for taking […]
Difference Between IFRS 15 and IAS 18
Key Difference – IFRS 15 vs IAS 18 Both IFRS 15 – ‘Revenue from Contracts with Customers’ and IAS 18 -‘Revenue’ relate to the accounting treatments on recording income generated through business activities. IAS 18 was issued in December 1993, and IFRS 15 will be effective for accounting periods starting from January 2018. The […]
Difference Between Administration and Liquidation
Key Difference – Administration vs Liquidation Both Administration and Liquidation are formal company insolvency (a state where the company is not in a position to settle its debts) practices. The key difference between administration and liquidation is that administration is a business rescue tool that may help the business to survive while a liquidation […]
Difference Between Yield to Maturity and Coupon Rate
Key Difference – Yield to Maturity vs Coupon Rate Yield to maturity and coupon rate are two critical aspects that should be understood when considering investing in bonds. A bond is a financial instrument issued by a company (corporate bonds) or the government (government bonds); in order to obtain access to capital from investors, […]
Difference Between Accrued Expense and Accounts Payable
Key Difference – Accrued Expense vs Accounts Payable Accrued expense and accounts payable are two important item recorded in the balance sheet of companies. The key difference between accrued expense and accounts payable is that while an accrued expense is an expense recognized in the accounting books for the period it is incurred whether […]
Difference Between Deferred Revenue and Recognized Revenue
Key Difference – Deferred Revenue vs Recognized Revenue There are a number of variations with regard to revenues based on the conditions they are been recorded. Deferred revenue and recognized revenue are two such types of revenues that may be confusing. The key difference between deferred revenue and recognized revenue is that in deferred […]
Difference Between Cost of Sales and Cost of Goods Sold
Key Difference – Cost of Sales vs Cost of Goods Sold Cost of sales and cost of goods sold are two terms that are often used interchangeably. Both cost of sales and cost of goods sold records the cost incurred to produce goods, to purchase goods, to sell to the end customer or to […]
Difference Between Cost of Equity and Cost of Debt
Key Difference – Cost of Equity vs Cost of Debt Cost of equity and cost of debt are the two main components of cost of capital (Opportunity cost of making an investment). Companies can acquire capital in the form of equity or debt, where the majority is keen on a combination of both. If […]
Difference Between Operating Income and Net Income
Key Difference – Operating Income vs Net Income Income can be simply referred to as the difference between total fund inflows less total expenses for a business. All companies thrive to make higher profits. Profits can be calculated from the main business activity, after considering all other incomes and expenses. Operating Income and Net […]
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