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Matching of costs with revenues
o A process in which expenses are recognised in the income statement on the basis of a direct association between the costs incurred and the earning of specific items of income. This process involves the simultaneous or combined recognition of revenues and expenses that result directly and jointly from the same transactions or other events. However,the application of the matching concept does not allow the recognition of items in the balance sheet which do not meet the definition of assets or liabilities.
Materiality
o Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements.
Marginal cost
o the cost of producing one extra unit = variable cost
Marginal revenue
o the revenue from one extra sale
Margin of safety
o the excess of sales over the break-even volume.
Margin
o Funds or collateral posted as a good faith performance guarantee. Futures and options exchanges often require traders to post initial margin when they enter into new contracts.
Market Liquidity Risk
o The possibility that a financial instrumet cannot be sold quickly and at full market value.
Market value of a share
o the market value has no meaning in Balance Sheet terms,merely representing the price which a share will realize if sold at any particular point in time
Memorandum of Association
o the constitution of the company,enabling outsiders to assess its structure and powers
Minority interest
o these represent the capital and built-up reserves of a group fo companies owed by shareholders outside the group.
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FCCA,CA(MIA)with more than 26 years of post-qualifying working experiences. Previous working stints with one of the big accounting four,Regional GFC & Group Treasurer in a group of Malaysian and Group CFO in Singapore public listed concern.Also author to another very popular free educational accounting cum finance blog:http://basiccollegeaccounting.com under the branding of College Accounting Coach.
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