Recent content by DerrickWD

  1. DerrickWD

    Accumulated Depreciation-Opening Balance at commencement date

    At the start date, your fixed assets should be at fair value. They enter the company's books at fair value. Loosely speaking, this fair value is already lowered by accumulated depreciation, but the accumulated depreciation is not entered separately on the books. This is an analogous treatment...
  2. DerrickWD

    Type of costing

    Job order costing would be suitable. You can call it batch process costing, but it works the same way.
  3. DerrickWD

    Is this definition of COGS right or wrong?

    I see no problem in what you quoted. Purchases are not cost of goods sold. When you make a purchase, you record the purchase in inventory, when using a perpetual inventory system, at cost. So say you bought goods for $300. Dr inventory. 300 Cr Cash...
  4. DerrickWD

    Net debt calculation / help

    Include all liabilities in the calculation of net debt.
  5. DerrickWD

    USA complicated and creative approach to ownership: question

    Client A isn't transferring any consideration at the time of sale? Why would B give up their claim of 100% of net profits in exchange for 25% of net profits, and nothing else? I'm sorry I can't answer your question, but it's pretty intriguing.
  6. DerrickWD

    Australia In house developed software - Intangible or PPE?

    It's an intangible asset, based on what you have provided so far. Can enter it on the balance sheet as long as you can reliably measure the costs used to develop it (the salary expense, and what have you).
  7. DerrickWD

    UK Website as Intangible Asset

    "Paragraph 57 of IAS 38 indicates that costs incurred in the development phase are capitalized only if an entity can demonstrate all the following: a. the technical feasibility of completing the intangible asset so that it will be available for use or sale. b. its intention to complete the...
  8. DerrickWD

    UK Website as Intangible Asset

    "Generally, costs incurred to develop, maintain, or restore intangible assets are recognized as an expense when incurred. Exceptions include costs associated with computer software intended to be sold, Web site development, and computer software for internal use." - Deloitte
  9. DerrickWD

    USA Transferring personal a vehicle to company

    For the original entry, I would have debited the truck for the fair value, credited short-term liability for $5000 and credited equity (owner's capital) for the difference between fair value and $5000. I suppose debiting equity, crediting accounts payable after the fact would have the same effect.
  10. DerrickWD

    UK depreciation rates on varying types of equipment ?

    It depends on which depreciation method you use, as Bad Medicine says, and the particular composition of your equipment accounts. It is more straightforward to depreciate each piece of equipment separately, with the depreciation rate depending on each equipment's useful life. To depreciate all...
  11. DerrickWD

    USA Credit Application

    I agree. That is a poor control environment setup. Sales shouldn't have access to or influence over the record keeping function. Well I hope you get an experienced A/R person to answer your question on here.
  12. DerrickWD

    USA Credit Application

    I'm sure you'll get better advice from someone more experienced, but to me this doesn't sound like something where you are bound by accounting rules or principles. You should probably follow the rules, procedures, or guidance that management sets out for you. If they want you to do it that...
  13. DerrickWD

    UK accounts payable on business plan.

    You can't really calculate accounts payable values based on the rest of the balance sheet. It is probably composed of the inventory they purchased in the month from the suppliers minus the payments they made to the suppliers in the month, both numbers you cannot deduce from a balance sheet alone.
  14. DerrickWD

    Enterprise Value?

    You have to stop thinking of enterprise value as equivalent to the purchase price of the company. Enterprise value is one way to interpret the true cost of buying a business. We can all intuitively realize that taking on debt is costly, so the more debt, the more cost recognized within...