 Quote of the Day “No one can resist an idea whose time has come.„
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Financial LeverageConcept Briefing:Financial Leverage or Gearing is the use of debt as a part of capital funds to invest in assets or projects with the hope to earn a greater rate of return than the interest rates. Leverage allows greater potential return to the investor than otherwise would have been available. The potential for loss is greater because if the investment becomes worthless, not only is that money lost, but the loan still needs to be repaid. Margin buying is a common way of utilizing the concept of leverage in investing. An unlevered firm can be seen as an all equity firm, whereas a levered firm is made up of ownership equity and debt. A firm's debt to equity ratio is therefore an indication of its leverage.Need more information on Financial Leverage?Continue reading 24.01.2007. 08:22 Impairment of AssetsConcept Briefing:Impairment of assets is an accounting standard (IAS 36) addressing mainly accounting for impairment of goodwill, intangible assets and property, plant and equipment. The standard includes requirements for identifying an impaired asset, measuring its recoverable amount, recognising or reversing any resulting impairment loss, and disclosing information on impairment losses or reversals of impairment losses.Need more information on Impairment of Assets?Continue reading 24.01.2007. 08:12 OptionAn option is a contract whereby one party (the holder or buyer) has the right but not the obligation to exercise a feature of the contract (the option) on or before a future date (the exercise date or expiry). The other party (the writer or seller) has the obligation to honor the specified feature of the contract. Since the option gives the buyer a right and the seller an obligation, the buyer has received something of value. The amount the buyer pays the seller for the option is called the option premium.Need more information on Option?Continue reading 23.01.2007. 09:54 |