Accounts payable may have enough items within it to require its own department in the company, or just a subsidiary ledger to supplement the General Ledger of the company. A subsidiary ledger gives full details of a line-item in the general ledger, especially when it is too detailed to include in the general ledger. The Accounts Payable Subsidiary Ledger will contain all of the transaction details for each credit and debit in the Payables history from a specific period. Continue reading...
The Accounts Receivable Subsidiary Ledger will be a separate ledger from a company’s General Ledger, where all of the information pertaining to all Accounts Receivable will be reported. Receivables may have only a line-item on the General Ledger of a company, but may have an entire department dedicated to servicing the receivable accounts. Because there may be a large amount of information in just the Receivables sub-account, there is often a Subsidiary Ledger dedicated to the minutia of all the Accounts Receivable business. Continue reading...
A spin-off is when a division or subsidiary of a company is separated from the parent corporation and starts to offer its own shares. The term can also colloquially refer to a situation where a group of talent leaves the larger company to start their own firm doing similar work as they used to do. As far as the SEC is concerned, the definition of a spin-off must include the shareholders of the parent corporation being offered a substantially proportionate amount of shares in the new company. Continue reading...
A consolidated tax return is a single filing that covers several subsidiary companies and their parent company. One of the advantages of doing so is that the capital gains of one can be offset by the capital losses of another. It can also allow a profit sharing plan for the parent corporation to use profits from the subsidiaries. Corporations with subsidiaries can file a consolidated tax return that covers all of the affiliated companies. Continue reading...
In the Cash Flow Statement, the cash flow in and out of investments, whether in shares of other companies or in capital assets, is recorded. The gains or losses from investment activities, including but not limited to shares of other companies (non-controlling interest) and the gains or losses experienced with subsidiaries, as well as negative cash flow or positive cash flow into or out of capital investment projects such as production infrastructure, are recorded in a portion of the Cash Flow Statement called Investing Activities. Continue reading...
Account reconcilement is the act of comparing and affirming multiple records of the same financial information. To “reconcile the books” is to compare different records of the same accounts to ensure that they match up. One might reconcile all the different record-keeping for the same account, such as copies of checks and receipts, to be sure that they add up to the balance and ledger shown on a bank account statement. It could be that the recipient of a check has not yet cashed it, and it is important to keep all records “synced” with one another. Continue reading...
Mortgage subsidy bond is another word for a mortgage revenue bond, which are municipal bonds which are used to fund mortgage relief programs and refinancing arrangements through the state or municipal government. In 1980, the Mortgage Subsidy Bond Tax Act established some rules and definitions surrounding mortgage subsidies and their bonds, and, more specifically, removing their exemption from federal taxation. Continue reading...
Consolidated financial statements are required when one company owns a controlling interest in another company. They must adhere to the same accounting principals as a the financial statements for a single company. Some detail tends to be lost if the parent company and subsidiaries have very different operations. If a company owns more than 50% of another company, their financial statements will be consolidated into one, according to GAAP. Up to that point, the interest in another company can be accounted for using cost-method or equity-method accounting. Continue reading...
Minority interest is a portion of a company’s stock that is not owned by the parent company, and refers to a type of ownership that generally cannot exert influence over a company’s business decisions. If an outside investor or another company has a less than 50% stake in a company via shares, then they are said to have a minority interest. From an accounting standpoint, only the dividends of a minority interest are counted on a company’s books. If they exert influence over the decision-making, then a percentage of the income may also need to be included. Continue reading...
Unlock the power of Consolidation in both Technical Analysis and Accounting! Discover how it guides traders in analyzing price patterns and informs buying decisions. Explore the intricacies of Financial Accounting Consolidation, merging entities, fair market values, and eliminating internal transactions. Essential knowledge for financial professionals navigating diverse markets and corporate finance. Continue reading...
An earnings recast is a revision of previous earnings reports, in which a company has made different choices with their accounting methodology that they feel are a better representation of their accounts. A common time to do this is after a company has divested itself of a subsidiary, when it will publish recast financial statements from the preceding years that show the company’s performance without the subsidiary being included. Continue reading...
Unlock the world of conglomerates in this insightful exploration. Discover their formation, advantages like risk diversification and capital allocation, and challenges such as the conglomerate discount and complexity. Delve into their historical rise and contemporary examples like Reliance Industries, Meta Platforms Inc., and Amazon. Stay tuned to witness the versatility of conglomerates in the ever-changing business landscape. #Conglomerates #BusinessInsights #Diversification Continue reading...
A 10-k is an annual filing required by the SEC for companies over a certain size, which provides the regulators with more detail than can be found in an Annual Report. If a company has over $10 Million in assets and equity shares divided among 500 or more people, it must file a 10-K within 60 days of the end of the fiscal year, as well as 10-Q filings quarterly, whether it is publicly or privately traded. The 10-K will include specific details that companies may not have put in their Annual Report to shareholders, such as executive compensation, subsidiaries, audited financial statements, lawsuits, and so on. Continue reading...
Asset management is a term often reserved for the overseeing of assets on behalf of a business or for wealthy clients with significant and various assets. A financial planner, CPA, or estate attorney who is capable of assisting a client with various types of assets and their optimal arrangement for that client’s goals can be said to be in a business of asset management. Tax considerations and cash flows may be a larger consideration with asset management than with investment advising. Continue reading...
There are fixed annuities, fixed/indexed annuities, variable annuities, hybrid annuities, income annuities, period income annuities, and possibly more. Insurance companies, and the insurance subsidiary wings of investment companies, have had many years to develop strategies and marketing ploys that help clients accumulate, protect, and distribute assets within various kinds of annuities. Variable annuities allow the annuitant to participate in the market through mutual funds — or, more accurately, “separate accounts” that mimic mutual funds. Continue reading...
Dive into the enigmatic realm of High-Frequency Trading (HFT), where speed, secrecy, and strategy reign supreme. This guide unveils the mechanics, strategies, and influential role of HFT firms in the financial markets. Discover how these covert powerhouses leverage cutting-edge technology and sophisticated algorithms to shape market dynamics and drive profits. Whether you're a financial enthusiast or a seasoned trader, this exploration of HFT offers valuable insights into the high-speed, high-stakes world of modern trading. Equip yourself with the knowledge to understand and navigate the complexities of HFT in today's rapidly evolving financial landscape. Continue reading...
When it comes to the global business landscape, size often matters. The largest companies in the world not only wield immense economic influence but also play a crucial role in shaping our everyday lives. In this article, we will take a closer look at the top 10 largest companies globally, as of January 2023, ranked by their 12-month trailing revenue. Continue reading...
Explore the fascinating world of stock market history with our top 10 highest stock prices ever recorded! From Warren Buffett's Berkshire Hathaway at $445,000 to Lindt & Sprüngli's sweet success, delve into the stories behind these iconic numbers. Witness Next PLC's fashion-forward rise, NVR's housing highs, and Amazon's online dominance. Discover the tech giants Alphabet and Apple, and journey back to the early 1900s with Calumet and Hecla and General Motors. These tales offer insights into market dynamics and business resilience. Continue reading...
One of the largest and most influential groups in the country is the American Association of Retired Persons, or AARP. It is a nonprofit organization whose mission is the improvement of the quality of life for its members. The group is one of the largest entities in the country, and it’s free monthly magazine has a higher circulation than any other publication in the United States. Its membership consists of over 40 million American citizens over the age of 50. Members receive many benefits each year, including many discounts and coupons on food, lodging, travel, and so on, for dues around $20 per person per year. Continue reading...
Institutional investors are corporations, banks, pension funds, mutual funds, and other forms of pooled capital which act as one entity to engage in securities transactions in the best interest of the constituents or company that they represent. Foreign Institutional Investors are those whose company is based in another country. Investments made on behalf of foreign companies, foreign financial institutions, and foreign funds (such as the foreign equivalent of hedge funds, mutual funds, and pension funds) are foreign institutional investments. There are usually reporting requirements for both the foreign government for the county in which the interests are held and for the domestic government of the institutional investor. Continue reading...