Thursday, December 30, 2010

~SFinanceK~ US official concerned at PSMA demand of Putting Indian sugar on negative list

Putting Indian sugar on negative list: US official concerned at PSMA demand

MUSHTAQ GHUMMAN ISLAMABAD (December 31, 2010) : The US Consulate General Lahore is reportedly worried about the unexpected demand of Pakistan Sugar Mills Association (PSMA) to place Indian sugar on negative list, sources in sugar industry told Business Recorder. Economic Officer of the US Consulate Jessica E Berlow called on Chairman PSMA Javed Kayani to get a sector briefing on sugar industry particularly about the PSMA stance on placing Indian sugar on the negative list.

When contacted, Chairman PSMA confirmed that the US Economic Officer held a meeting with him and inquired about the likely repercussions and the concern of stakeholders, inclusive of sugar industry and growers, over import of Indian sugar. "I informed Ms Berlow that in the event of dumping of sugar from India, payments to growers would be delayed as cheap and substandard Indian sugar would halt the sale of local industry which is paying a very heavy cost to the growers and as a result the cost of producing sugar would go up phenomenally," Kayani added. He also explained to her that it is important to safeguard the interests of the country.

Chairman PSMA further gave her details about the production figures up to December 30, with Punjab having produced 400,000 tons, Sindh 125,000 tons and KPK 25,000 tons. Javed Kayani also gave her province-wise estimates and hoped that Punjab would end up with 2.2 million tons, Sindh 1.2 million tons and KPK 300,000 tons of sugar after the crushing season.

US Economic Officer wanted to ascertain any likely sugar shortage in the country and showed concern about the fact that consumers are facing a sugar price hike, he continued. Javed Kayani elucidated the dynamics of the sugar industry and argued that the current year's production and carryover inventories of TCP would meet the requirements of the country and that there is no imminent shortage in the near term.

According to him, crop pattern abruptly changed with a sudden increase in the wheat prices during the preceding years and area under cultivation of sugarcane reduced thereby causing resultant shortage of sugar. Chairman PSMA argued that the industry has an installed capacity to crush 565,000 tons of sugarcane daily which can produce over 5 million tons of sugar in 100 days provided the industry gets sugarcane commensurate with capacity. "I urged the US to help Pakistan in the area of Research and Development to introduce high sucrose and high yield varieties of sugarcane in Pakistan to achieve autarky in sugar and to overcome future deficits," he concluded
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Muhammad Noman Ansari

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Monday, November 15, 2010

~SFinanceK~ The 'Flood Surcharge' would be charged on monthly basis

The 'Flood Surcharge' would be charged on monthly basis for six months period - January to June 2010, wherever applicable. Every salaried person, importer, advance taxpayer and commercial/industrial consumers of electricity would be bound to pay 10 percent income tax surcharge on the tax payable.

An official said Wednesday that the 'Flood Surcharge' would not be one-time levy, but it would be charged on monthly basis for six months. One-time levy does not mean that the 'Flood Surcharge' would be collected just for one time on tax deductions made from salaried class.

Contrary to this, if the Parliament approves the 'Flood Surcharge' in December 2010, the levy would be imposed from January 2011 till the end of current fiscal year. One-time levy means imposition of tax for one fiscal year. As soon as the Parliament would approve the 'Flood Surcharge', it would be imposed with immediate effect.

According to sources, all transactions of withholding agents including deduction of withholding tax on supplies and contracts would be subjected to 10 percent 'Flood Surcharge'. However, it would only be applicable on the already tax deducted. Therefore, if a salaried person is paying monthly income tax of Rs 600 per month, 'Flood Surcharge' of Rs 60 would be applicable on the already deducted tax. This is a very nominal amount to be paid by the salaried class.

Sources said the importers would have to pay 10 percent surcharge on each consignment imported into the country. If an importer has paid 10 percent 'Flood Surcharge' on the import of a specific consignment, he would again pay the levy on the import of a separate consignment.

Within the withholding tax regime, all kinds of business transactions would be covered under the 'Flood Surcharge' regime. The withholding tax deductions would be liable to the 'Flood Surcharge'. For example, the dividend earners would be liable to pay the surcharge, major areas of withholding tax deductions including taxes on salary, contracts, services, profit on debt, dividends, royalties, etc, would be subjected to the 'Flood Surcharge'.

The taxpayers would be liable to pay 10 percent income tax surcharge for the Tax Year 2011. The taxpayers liable to pay 'Flood Surcharge' would declare their actual income in the income tax returns to be filed for the Tax Year 2011. The date of filing of returns for the Tax Year 2010 has been expired and now the returns pertaining to the Tax Year 2011 would deal with the declarations for the purpose of the 'Flood Surcharge'. The corporate sector would file their returns in December 2010, but they would pay the surcharge with the returns to be filed for the Tax Year 2011. The government cannot do discriminatory treatment with the corporate sector and they would also pay the surcharge with the returns to be filed for the Tax Year 2011.

Recorder Report.

:) !Thanks! (:

Best Wishes & Warmest Regards,
Muhammad Noman Ansari

Monday, November 1, 2010

~SFinanceK~ Excel 2002

As soon as MS Excel 2007 was introduced in the professional horizons it became a super hit with in no time. Each and every professional liked its functions, user friendly interfaces and arrangement of different buttons in the menus. Moreover, it contains lots of formulas in it that also helps professionals. Now MS Excel 2010 has also been introduced but it did not get that much appreciation so far.
Whatever the new technology is, if you want to learn MS Excel you will have to go to the basics. One school of thought is that MS Excel 2007 is very useful for them who already have a command on MS Excel 2002. In my personal opinion as well, if you are a beginner or does not have complete grip in Excel, you should start with MS Excel 2002. A complete guide of MS Excel 2002 is available here. This book contains 500 pages and teaches you Excel 2002 from the very beginning level to the extreme professional level. I hope you will like it. You can download it by clicking on the following mentioned link.
http://uptodatearticles.com/2010/10/guide-to-ms-excel-2002/

__._,_.___--------------------

:) !Thanks! (:

Best Wishes & Warmest Regards,
Muhammad Noman Ansari

Thursday, October 21, 2010

~SFinanceK~ Greenshoe Option

Greenshoe Option

What Does Greenshoe Option Mean?
A provision contained in an underwriting agreement that gives the underwriter the right to sell investors more shares than originally planned by the issuer. This would normally be done if the demand for a security issue proves higher than expected. Legally referred to as an over-allotment option.

A greenshoe option can provide additional price stability to a security issue because the underwriter has the ability to increase supply and smooth out price fluctuations if demand surges.

Investopedia explains Greenshoe Option
Greenshoe options typically allow underwriters to sell up to 15% more shares than the original number set by the issuer, if demand conditions warrant such action. However, some issuers prefer not to include greenshoe options in their underwriting agreements under certain circumstances, such as if the issuer wants to fund a specific project with a fixed amount of cost and does not want more capital than it originally sought.

The term is derived from the fact that the Green Shoe Company was the first to issue this type of option.

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Best Wishes & Warmest Regards,
Muhammad Noman Ansari

Monday, October 18, 2010

~SFinanceK~ e-Filing of Income Tax Returns

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Best Wishes & Warmest Regards,
Muhammad Noman Ansari

~SFinanceK~ Net Foreign Investments in Pakistan Update

Net Foreign Investments in Pakistan has declined by 28.5% Year on Year to US$ 455 million in the of 1st quarter of the Current Financial Year.

This is as a result of decline in Foreign Direct Investment by 9.9% YoY to US$387 million and Foreign Portfolio Investment declined by 67.5% to US$ 68.5 million.

:) Thanks! (:

Best Wishes & Warmest Regards,
Muhammad Noman Ansari

Friday, October 15, 2010

~SFinanceK~ Pakistan Auto Sector Updates-September 2010

9%

Year on Year (YoY) and 5% Month on Month (MoM)

Growth is visible in the sector. Honda Cars outperforming the sector with a YoY sales growth of 29% and MoM growth of 17% during September 2010.

Market Share First Quarter:

Pak Suzuki------------ 53%

Indus Motors --------- 35%

Honda ------------------ 12%

Challenges for the industry:

1. Increase in discount rate

2. Inflation.

3. Appreciation of Japanese Yen

4. Flood impact.

5. Higher input cost (steel prices).

Resulting in lower in margins.

Some Facts:

Monthly Sales Growth in units:

Corolla ____________ 6%.

Civic ______________ 11%

City _______________ 21%

Cuore ____________ -18%

Liana_____________ -35%

Swift _____________ 12%

Aulto_____________ -8%

Mehran ___________ 13%

Suzuki Ravi ______________ 7% Market Share 90%

Suzuki Bolan ____________ 6%

Hilux ________________ -40%

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Best Wishes & Warmest Regards,
Muhammad Noman Ansari

Wednesday, October 13, 2010

~SFinanceK~ What is the fair value of the Taj Mahal or the Statue of Liberty?

FOLLOW THIS DISCUSSION ON FINANCE 3.0 CLICK HERE:

What is the fair value of the Taj Mahal or the Statue of Liberty?

Answered by Mr.Sriram Gopalakrishnan on another Forum.

Public assets such as the ones in the question are generally accounted for in the books of Government entities.

Para 9 of Preface to IFRS states that "The International Public Sector Accounting Standards Board (IPSASB) prepares accounting standards for governments and other public sector entities". These standards are issued as IPSAS 1, IPSAS 2, ... and so on.

Accordingly, IPSAS 17 (Property Plant and Equipment) covers these type of assets. These assets fall within the definition of "HERITAGE ASSETS" within IPSAS 17.

Heritage assets are seperately described "because of their cultural, environmental, or historical significance. Examples of heritage assets include historical buildings and monuments, archaeological sites, conservation areas and nature reserves, and works of art."

"Certain characteristics, including the following, are often displayed by heritage assets (although these characteristics are not exclusive to such assets):

(a) Their value in cultural, environmental, educational, and historical terms is unlikely to be fully reflected in a financial value based purely on a market price;
(b) Legal and/or statutory obligations may impose prohibitions or severe restrictions on disposal by sale;
(c) They are often irreplaceable and their value may increase over time, even if their physical condition deteriorates; and
(d) It may be difficult to estimate their useful lives, which in some cases could be several hundred years.

Public sector entities may have large holdings of heritage assets that have been acquired over many years and by various means, including purchase, donation, bequest, and sequestration. These assets are rarely held for their ability to generate cash inflows, and there may be legal or social obstacles to using them for such purposes."

Hence, it may be noted that IPSAS recognizes through (a) to (d) above that practically it may not be possible to measure heritage assets (fair value or otherwise).

Hence a Government has an OPTION not to account for these assets at all. However, even if the Government chooses to account for these assets, it need not apply the measurement requirements. Only disclosure requirements, as necessary, will apply. (As per Paragraphs 9 to 12 of IPSAS 17)

CONCLUSION:

Now, therefore the final asnwer to your question is that there is no requirement under IPSAS 17 to measure these type of assets because inherently, it is not possible to measure them.

:) !Thanks! (:

Best Wishes & Warmest Regards,
Muhammad Noman Ansari

~SFinanceK~ Corporate Laws

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Best Wishes & Warmest Regards,
Muhammad Noman Ansari

---------- Forwarded message ----------
From: comsdev <comsdev@yahoo.com>
Date: Tue, Oct 12, 2010 at 10:30 AM
Subject: [accountants_forum] Corporate Laws
To: accountants_forum@yahoogroups.com

Students face difficulties when they start preparation of Corporate Laws. Reason is that syllabus is too huge and they don't even have any book in which they can find complete syllabus. They need to search a lot to complete the contents of the syllabus but still it remains incomplete because it consists of 21 rules, ordinances, acts and regulations. So for the convenience of students complete syllabus of Corporate Laws is arranged here. It can be downloaded with just a single click. Following rules, acts, ordinances are available for download at below mentioned link.

http://uptodatearticles.com/2010/10/corporate-laws-pakistan/

* Syllabus
* Companies Ordinance, 1984
* Companies Rules, 1985
* Companies (Issue of Capital) Rules, 1996
* Companies (Appointment of Legal Advisors) Rules, 1975
* Companies (Buy-back of Shares) Rules, 1999
* Companies' Share Capital (Variation in Rights and Privileges) Rules, 2000
* NBFC Rules issued by SECP
* Foreign Exchange Manual 8th Edition
* Listing Regulations
* Code of Corporate Governance
* Banking Companies Ordinance 1962
* Cebtral Depositories Act 1997
* Central Depository Companies Establishment and Regulation Rules 1996
* Modaraba Companies and Modarabas (Floatation and Control) Ordinance, 1980

* Modaraba Companies and Modaraba Rules, 1981

* Insurance Ordinance 2000

* Insurance Rules 2002

* Securities and Exchange Ordinance 1969

* Securities and Exchange Rules 1971

* Competition Ordinance 2010

* Listed Companies (Substantial Acquisition of Voting Shares and Takeover) ordinance, 2002

Thursday, October 7, 2010

~SFinanceK~ Top 3 Pitfalls Of Discounted Cash Flow Analysis-courtesy Investopedia.com

Top 3 Pitfalls Of Discounted Cash Flow Analysis

by Bryn Harman,CFA (Contact Author | Biography)

Most finance courses espouse the gospel of discounted cash flow (DCF) analysis as the preferred valuation methodology for all cash flow generating assets. In theory (and in college final examinations), this technique works great. In practice, DCF can be difficult to apply in the valuation of stocks. Even if one believes the gospel of DCF, other valuation approaches are useful to help generate a complete valuation picture of a stock. (For more background, read Taking Stock Of Discounted Cash Flow.)

IN PICTURES: 8 Signs Of A Doomed Stock - Investopedia Slideshows

Basics of DCF Analysis
DCF theory holds that the value of all cash flow generating assets - from fixed-income to investments to an entire company - is the present value of the expected cash flow stream given some appropriate discount rate. The formula for this is usually given something like this:

PV = CF₁ / (1+k) + CF₂ / (1+k)² + … [TCF / (k - g)] / (1+k)^n-1

Where:

PV = present value
CF_i = cash flow in year i
k = discount rate
TCF = the terminal year cash flow
g = growth rate assumption in perpetuity beyond terminal year
n = the number of periods in the valuation model including the terminal year

For equity valuation, analysts most often use some form of free cash flow for the valuation model cash flows. FCF is usually calculated as operating cash flow less capital expenditures. Note that the PV has to be divided by the current number of shares outstanding to arrive at a per share valuation. Sometimes analysts will use an adjusted unlevered free cash flow to calculate a present value of cash flows to all firm stakeholders. They will then subtract the current value of claims senior to equity to calculate the equity DCF value and arrive at an equity value. (For more insight, read Taking Stock Of Discounted Cash Flow and Discounted Cash Flow Analysis.)

Problems with DCF

Operating Cash Flow Projections
The first and most important factor in calculating the DCF value of a stock is estimating the series of operating cash flow projections. There are a number of inherent problems with earnings and cash flow forecasting that can generate problems with DCF analysis. The most prevalent is that the uncertainty with cash flow projection increases for each year in the forecast - and DCF models often use five or even 10 years' worth of estimates. The "out" years of the model can be total shots in the dark. Analysts may have a good idea of what operating cash flow will be for the current year and the following year, but beyond that, the ability to project earnings and cash flow diminishes rapidly. To make matters worse, cash flow projections in any given year will most likely be based largely on results for the preceding years. Small, erroneous assumptions in the first couple years of a model can amplify variances in operating cash flow projections in the later years of the model. (To learn more, check out Style Matters In Financial Modeling.)
Capital Expenditure Projections
Free cash flow projection involves projecting capital expenditures for each model year. Again, the degree of uncertainty increases with each additional year in the model. Capital expenditures can be largely discretionary; in a down year, a company's management may rein in capital expenditure plans (the inverse may also be true). Capital expenditure assumptions are, therefore, usually quite risky. While there are a number of techniques to calculate capital expenditures, such as using fixed asset turnover ratios or even a percentage of revenues method, small changes in model assumptions can widely affect the result of the DCF calculation.

Discount Rate and Growth Rate
Perhaps the most contentious assumptions in a DCF model are the discount rate and growth rate assumptions. There are many ways to approach the discount rate in an equity DCF model. Analysts might use the Markowitzian R = R_f + β(R_m - R_f) or maybe the weighted average cost of capitalof the firm as the discount rate in the DCF model. Both approaches are quite theoretical and may not work well in real world investing applications. Other investors may choose to use an arbitrary standard hurdle rate to evaluate all equity investments. In this way, all investments are evaluated against each other on the same footing. When choosing a method to estimate the discount rate, there are typically no surefire (or easy) answers. (For more on calculating the discount rate, see Investors Need A Good WACC.)

Perhaps the biggest problem with growth rate assumptions is when they are used as a perpetual growth rate assumption. Assuming that anything will hold in perpetuity is highly theoretical. Many analysts contend that all going concern companies mature in such a way that their sustainable growth rates will gravitate toward the long-term rate of economic growth in the long run. It is therefore common to see a long-term growth rate assumption of around 4%, based on the long-term track record of economic growth in the United States. In addition, a company's growth rate will change, sometimes dramatically, from year to year or even decade to decade. Seldom does a growth rate gravitate to a mature company growth rate and then sit there forever.

Due to the nature of DCF calculation, the method is extremely sensitive to small changes in the discount rate and the growth rate assumption. For example, assume that an analyst projects company X's free cash flow as follows:

In this case, given standard DCF methodology, a 12% discount rate and a 4% terminal growth rate generates a per-share valuation of $12.73. Changing only the discount rate to 10% and leaving all other variables the same, the value is $16.21. That's a 27% change based on a 200 basis point change in the discount rate.

Alternative Methodologies
Even if one believes that DCF is the be-all and end-all in assessing the value of an equity investment, it is very useful to supplement the approach with multiple-based target price approaches. If you are going to project income and cash flows, it is easy to use the supplementary approaches. It is important to assess which trading multiples (P/E, price/cash flow, etc.) are applicable based on the company's history and its sector. Choosing a target multiple range is where it gets tricky.

While this is analogous to arbitrary discount rate selection, by using a trailing earnings number two years out and an appropriate P/E multiple to calculate a target price, this will entail far fewer assumptions to "value" the stock than under the DCF scenario. This improves the reliability of the conclusion relative to the DCF approach. Because we know what a company's P/E or price/cash flow multiple is after every trade, we have a lot of historical data from which to assess the future multiple possibilities. In contrast, the DCF model discount rate is always theoretical and we do not really have any historical data to draw from when calculating it.

Be Open Minded
As an investor, it's wise to avoid being too reliant on one method over another when assessing the value of stocks. While most investors probably agree that the value of a stock is related to the present value of the future stream of free cash flow, the DCF approach can be difficult to apply in real-world scenarios. Supplementing the approach with multiple based target price approaches is useful in developing a full understanding of the value of a stock.

For related reading, see Relative Valuation: Don't Get Trapped.

by Bryn Harman,CFA (Contact Author | Biography)

Bryn Harman, CFA, is a seasoned investment professional with more than 13 years of experience in the fields of corporate finance and investment finance. For the past seven years, his focus has been on bottom-up fundamental analysis of small cap companies. Harman is currently the director of research for a value-oriented investment firm in the Northwest. Bryn has a Bachelor of Commerce from the University of Saskatchewan, Canada.

** This article and more are available at Investopedia.com - Your Source for Investing Education **

:) !Thanks! (:

Best Wishes & Warmest Regards,
Muhammad Noman Ansari

Wednesday, October 6, 2010

~SFinanceK~ Suroor Investment acquires Atlas Bank's majority share

Suroor Investment acquires Atlas Bank's majority share

RECORDER REPORT
KARACHI (November 24 2009): Suroor Investment Ltd, led by prominent banker Hussain Lawai, has acquired majority shares of Atlas Bank limited at a prices of Rs 4.50 per share. "Suroor Investment is keenly interested to enhance Arif Habib Bank's nation-wide operation by acquiring some small banks, besides launching new branches in major cities and rural areas," sources said, and added that after successful acquisition deal with Mybank, the sponsors of Arif Habib Bank, under their expansion plan, had purchased majority shares of the Atlas Bank.

They said that negotiations between 'Suroor Investment' and Atlas Bank were under process for last six weeks for the acquisition of majority shares of the bank. However, Atlas Bank sponsors on Monday also formally announced that they have entered into an agreement with Suroor Investments for sale of 58.31 percent of their share-holding in the bank. However, the deal is subject to necessary legal and other approvals.

Sources said that Suroor Investment would pay Rs 1.3 billion to the sponsors of Atlas Bank for the purchase of over 58 percent shares of bank. Atlas Bank had faced serious liquidity problems, like other banks, during fiscal year 2009 and was unable to meet the State Bank's Minimum Capital Requirement (MCR).

Therefore, the central bank granted one-year extension to meet MCR condition, they said "Suroor Investment has already acquired majority shares of Arif Habib Bank and Mybank under its plan to set up a new bank, which would provide banking facilities to the middle businessmen focusing on trading business," sources said.

Earlier, on October 1, 2009, Suroor Investment acquired majority shares of Mybank with investment of Rs 2.4 billion at a price of some Rs 8 per share, they added. Sources said that acquisition of Atlas Bank by Suroor Investment is a major development in the banking sector, which is presently facing several difficulties like decline in profit and high non-performing loans.

They said sponsors of Arif Habib Bank have not conducted due diligence for the acquisition of Atlas Bank, as already three have done in the past by different parties. The same situation was seen in Mybank case, as it was also facing paid-up capital problems, which compelled the bank to merge in some other bank and finally Mybank's majority shares have been acquired by Suroor Investment Ltd.

It may be mentioned here that Atlas Bank--a company of Atlas Group--with equity of Rs 3.41 billion and assets base of Rs 30.40 billion, is partnered by a leading European financial group, DEG-Deutsche Investitions of Germany. As a scheduled commercial bank, Atlas Bank is engaged in commercial banking operations through its network of 40 online, real-time branches in 17 major cities of Pakistan.

:) !Thanks! (:

Best Wishes & Warmest Regards,
Muhammad Noman Ansari

Monday, October 4, 2010

~SFinanceK~ Behavioral Finance

Behavioral Finance

What Does Behavioral Finance Mean?

http://www.investopedia.com/terms/b/behavioralfinance.asp

A field of finance that proposes psychology-based theories to explain stock market anomalies. Within behavioral finance, it is assumed that the information structure and the characteristics of market participants systematically influence individuals' investment decisions as well as market outcomes.

Investopedia explains Behavioral Finance

http://www.investopedia.com/terms/b/behavioralfinance.asp

There have been many studies that have documented long-term historical phenomena in securities markets that contradict the efficient market hypothesis and cannot be captured plausibly in models based on perfect investor rationality. Behavioral finance attempts to fill the void.

:) !Thanks! (:

Best Wishes & Warmest Regards,
Muhammad Noman Ansari

Saturday, October 2, 2010

~SFinanceK~ GAAP -Power Point attachement

:) !Thanks! (:

Best Wishes & Warmest Regards,
Muhammad Noman Ansari

---------- Forwarded message ----------
From: khalid aziz <khalid_a_aziz@yahoo.com>
Date: Thu, Sep 30, 2010 at 10:10 AM
Subject: [accountants_forum] GAAP [1 Attachment]
To: acca_forum@yahoogroups.com, acca_karachi@yahoogroups.com, accountants_forum@yahoogroups.com, accountants_karachi@yahoogroups.com, capak@yahoogroups.com, cost-accountants@yahoogroups.com, icma_khi@yahoogroups.com, icmap-khi@yahoogroups.com, managementaccountants_forum@yahoogroups.com, pipfa_pm@yahoogroups.com
Cc: public_awareness@yahoogroups.com

[Attachment(s) from khalid aziz included below]

KHALID AZIZ
0322-3385752
0312-2302870
COACHING CLASSES
ACCOUNTING OF ICMAP 1,2,3,4
CA.MOD A,B,C,D
PIPFA
CAT T1,T2,T3,T4,T5,T6,T7,T8

ACCA F1,F2,F3,F5,F8,P1,P7
ACCOUNTING O/A LEVEL
BBA
MBA
B.COM & M.COM
MICRO ECONOMICS & STATISTICS OF MA-ECONOMICS

EDUCATION IS OUR NATION'S SWORD

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Friday, October 1, 2010

RE: ~SFinanceK~ Bad Debt Expenses

Bad Debt Expense is the expense incurred due to a firm's inability to collect accounts receivable which is usually called as bad debts. Bad debt expense is classified usually as an administrative or selling expense. It is also called uncollectible accounts expense.

BR,

Shariq

From: sms-finance-knowledge@googlegroups.com [mailto:sms-finance-knowledge@googlegroups.com] On Behalf Of Muhammad Noman Ansari
Sent: Thursday, September 30, 2010 4:38 PM
To: accountants_forum@yahoogroups.com; sms-finance-knowledge@googlegroups.com
Subject: ~SFinanceK~ Bad Debt Expenses

Bad debt expenses are operating expenses, But are they Administrative expense or Selling and distribution expenses? Answers with reasons are required.

:) !Thanks! (:

Best Wishes & Warmest Regards,
Muhammad Noman Ansari

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Re: ~SFinanceK~ Bad Debt Expenses

dEXPLAIN IN DETAIL

If we imagine buying something, such as groceries, it's easy to picture ourselves standing at the checkout, writing out a personal check, and taking possession of the goods. It's a simple transaction—we exchange our money for the store's groceries.

In the world of business, however, many companies must be willing to sell their goods (or services) on credit. This would be equivalent to the grocer transferring ownership of the groceries to you, issuing a sales invoice, and allowing you to pay for the groceries at a later date.

Whenever a seller decides to offer its goods or services on credit, two things happen: (1) the seller boosts its potential to increase revenues since many buyers appreciate the convenience and efficiency of making purchases on credit, and (2) the seller opens itself up to potential losses if its customers do not pay the sales invoice amount when it becomes due.

Under the accrual basis of accounting (which we will be using throughout our discussion) a sale on credit will:

Increase sales or sales revenues, which are reported on the income statement, and
Increase the amount due from customers, which is reported as accounts receivable—an asset reported on the balance sheet.

If a buyer does not pay the amount it owes, the seller will report:

A credit loss or bad debts expense on its income statement, and
A reduction of accounts receivable on its balance sheet.

With respect to financial statements, the seller should report its estimated credit losses as soon as possible using the allowance method. For income tax purposes, however, losses are reported at a later date through the use of the direct write-off method.

AHSAN

MBA (FINANCE) FROM ADAMSON UNIVERSITY , KASHMIR ROAD, KARACHI, PAKISTAN

From: Muhammad Noman Ansari <muhammadnomanansari@gmail.com>
To: accountants_forum@yahoogroups.com; sms-finance-knowledge@googlegroups.com
Sent: Thu, September 30, 2010 3:38:11 PM
Subject: ~SFinanceK~ Bad Debt Expenses

Bad debt expenses are operating expenses, But are they Administrative expense or Selling and distribution expenses? Answers with reasons are required.

:) !Thanks! (:

Best Wishes & Warmest Regards,
Muhammad Noman Ansari

~SFinanceK~ Professional Risk Manager - PRM - Professional Education.

Professional Risk Manager - PRM

What Does Professional Risk Manager - PRM Mean?
A professional designation awarded by the Professional Risk Managers' International Association to financial risk managers who pass four exams of one to two hours each. The four exams cover financial theory, financial instruments and markets, mathematical foundations of risk measurement, risk management practices and case studies, best practices, conduct, ethics and bylaws. Successful applicants earn the right to use the PRM designation with their names, which can improve job opportunities, professional reputation and pay.

Investopedia explains Professional Risk Manager - PRM
The study program to become a PRM covers the financial theory behind risk management, risk measurement, option theory, financial instruments, trading markets, best practices and historical risk-management failures. Individuals with the PRM designation may work as enterprise risk managers, operational risk analysts, credit risk managers, risk advisory consultants and more. Types of businesses that hire PRMs include insurance companies, asset managers, hedge funds, consulting firms and investment banks.

:) !Thanks! (:

Best Wishes & Warmest Regards,
Muhammad Noman Ansari

Thursday, September 30, 2010

Google Groups: You've been added to sms-Finance-Knowledge

Noman Ansari muhammadnomanansari@gmail.com has added you to the sms-Finance-
Knowledge group with this message:

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Spread Knowledge among the People.
Knowledge related to Finance, Trade, Accounting, Economics, Investments,
Banking, Taxation, Stocks, Management Accounting, and much more.
The only purpose is to Share Knowledge, as Knowledge increases on Sharing.
Knowledge is not for books, It's for people.

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Finance Knowledge

Thursday, December 30, 2010

~SFinanceK~ US official concerned at PSMA demand of Putting Indian sugar on negative list

Putting Indian sugar on negative list: US official concerned at PSMA demand

Monday, November 15, 2010

~SFinanceK~ The 'Flood Surcharge' would be charged on monthly basis

Monday, November 1, 2010

~SFinanceK~ Excel 2002

Thursday, October 21, 2010

~SFinanceK~ Greenshoe Option

Greenshoe Option

Monday, October 18, 2010

~SFinanceK~ e-Filing of Income Tax Returns

~SFinanceK~ Net Foreign Investments in Pakistan Update

Friday, October 15, 2010

~SFinanceK~ Pakistan Auto Sector Updates-September 2010

Wednesday, October 13, 2010

~SFinanceK~ What is the fair value of the Taj Mahal or the Statue of Liberty?

~SFinanceK~ Corporate Laws

Thursday, October 7, 2010

~SFinanceK~ Top 3 Pitfalls Of Discounted Cash Flow Analysis-courtesy Investopedia.com

Top 3 Pitfalls Of Discounted Cash Flow Analysis

Wednesday, October 6, 2010

~SFinanceK~ Suroor Investment acquires Atlas Bank's majority share

Monday, October 4, 2010

~SFinanceK~ Behavioral Finance

Behavioral Finance

Saturday, October 2, 2010

~SFinanceK~ GAAP -Power Point attachement

Friday, October 1, 2010

RE: ~SFinanceK~ Bad Debt Expenses

Re: ~SFinanceK~ Bad Debt Expenses

~SFinanceK~ Professional Risk Manager - PRM - Professional Education.

Professional Risk Manager - PRM

Thursday, September 30, 2010

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