Difference between Provision and Reserves Provisions There are certain expenses/losses which are related to the current accounting period but amount of which is not known with certainty because they are not yet incurred. It is necessary to make provision for such items for ascertaining true net profit Depreciation bad and doubtful debts taxation discount … Read more
Secret reserve is a reserve which does not appear in the balance sheet. It may also help to reduce the disclosed profits and also the tax liability. The secret reserve can be merged with the profits during the lean periods to show improved profits. Management may resort to creation of secret reserve by charging higher … Read more
The Factors determining amount of depreciation are Cost, Useful Life, Net Realizable Value and Depreciable cost Cost Useful Life Net Realisable Value Depreciable Cost Cost of a fixed asset is “the total cost spent in connection with its acquisition, installation and commissioning as well as for add item or improvement of the depreciable asset”. Useful … Read more
What is Mineral ? A naturally occurring substance that has a definite chemical composition is a mineral. Minerals are not evenly distributed over space. They are concentrated in a particular area or rock formations. Some minerals are found in areas which are not easily accessible such as the Arctic ocean bed and Antarctica. Minerals are … Read more