The effective interest method is used to discount or write off a bond.
The amount of the discount on the bond is amortized as interest expense over the life of the bond. As the book value of a bond increases, the amount of interest expense increases.
The effective interest method takes into account the impact of the purchase price of a bond, and does not take into account only its face value or face value.
For lenders or investors, the effective interest rate reflects the actual rate of return much better than the nominal rate.
For borrowers, the effective interest rate reflects costs more effectively.
Unlike the real interest rate, the effective interest rate does not take inflation into account.
Accountability is the acceptance of responsibility for one’s actions. This implies a willingness to be transparent, allowing others to observe and evaluate their work.
Accounting policies are the procedures a company uses to prepare financial statements. Unlike accounting principles, which are rules, accounting policies are the standard for following those rules.
Acquisition accounting is a set of formal guidelines describing how the acquirer should report the assets, liabilities, non-controlling interests and goodwill of the acquired company.
Performance Based Management (ABM) is a means of analyzing a company’s profitability by looking at every aspect of its business to determine its strengths and weaknesses.