Key Difference – Translation vs Remeasurement Translation and remesurement are two common aspects associated with using foreign currency. Both are based on the principles of exchange rates (the rate at which a currency will be converted to another). However, here is a subtle difference between the two conversion methods. The key difference between translation […]
Difference Between Derivatives and Futures
Key Difference – Derivatives vs Futures The key difference between derivatives and futures is that derivatives are financial instruments whose value depends on the value of another underlying asset whereas futures is an agreement, to buy or sell a particular commodity or financial instrument at a predetermined price at a specific date in the future. […]
Difference Between Commodity Exchange and Stock Exchange
Key Difference – Commodity Exchange vs Stock Exchange The key difference between commodity exchange and stock exchange is that a commodity exchange is an exchange where commodities are traded whereas stock exchange is an exchange where stock brokers and investors buy and/or sell stocks, bonds, and other securities. Both types of exchanges are driven by the demand and supply for commodities or […]
Difference Between Hedging and Forward Contract
Key Difference – Hedging vs Forward Contract The key difference between hedging and forward contract is that hedging is a technique used to reduce the risk of a financial asset whereas a forward contract is a contract between two parties to buy or sell an asset at a specified price on a future date. Since the […]
Difference Between Functional Currency and Reporting Currency
Key Difference – Functional Currency vs Reporting Currency Some companies conduct transactions in one currency and record the financial results in a different currency; thus, giving rise to two types of currencies, functional and reporting currency. IAS 21- ‘The Effects of Changes in Foreign Exchange Rates’ provides definitions to the terminologies of these two […]
Difference Between Analysis and Interpretation of Financial Statements
Key Difference – Analysis vs Interpretation of Financial Statements Financial statements include the income statement, balance sheet, statement of cash flows, and a statement of changes in equity. The information in these statements is analysed and interpreted in order to facilitate decision making. The key difference between analysis and interpretation of financial statements is […]
Difference Between Comparative and Common Size Statement
Key Difference – Comparative vs Common Size Statement Financial statements are of wide use to a number of stakeholders, especially for shareholders as such statements provide a number of important information. Comparative and common size financial statements are two forms of statements used by companies to extract financial information. The key difference between comparative […]
Difference Between Passive and Non-passive Income
Key Difference – Passive vs Non-passive Income The key difference between passive and non-passive income is that passive income refers to the income resulting from rental activity or any other business activity in which the investor does not materially participate whereas non-passive income consists of any type of active income, such as wages, business income or […]
Difference Between Trend Analysis and Comparative Analysis
Key Difference – Trend Analysis vs Comparative Analysis Trend and comparative analysis are two main types of analysis methods used to study the performance of the current financial year and plan the upcoming financial year’s budget using financial statements. The key difference between trend analysis and comparative analysis is that trend analysis is a […]
Difference Between Horizontal and Vertical Analysis
Key Difference – Horizontal vs Vertical Analysis Financial statements such as the income statement, balance sheet, and cash flow statement are important statements that should be studied extensively in order to arrive at conclusions regarding the performance of the current financial year as well as to assist planning the upcoming financial year’s budget. Horizontal […]
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