Shareholders' funds It is a measure of shareholders total interest in the company represented by the total share capital plus reserves.

It can be measured by the balance sheet value of shareholders interest in a company. For the accounts of a company with no subsidiaries, it is total assets minus total liabilities. For consolidated group accounts, the value of minority interest is excluded. It can be expressed as follows:
1)

2)

Equity Share Capital + Preference Share Capital+ Reserve and Surplus Fictitious Assets (if any) Total Assets Fictitious Assets All External Liabilities

Money against share warrants A share warrant is a document in which it is stated that the bearer of the warrant is entitled to the shares specified therein. Money against share warrants means the money that the bearer would receive for the shares. Share application money pending allotment Share Application money is that money received by a company during an initial public offering. This means that the price of the shares has been received but the shares have not yet been allotted to the investors. The company cannot use the money unless the entire allotment process is done. Tangible assets Assets that have a physical form are called tangible assets. Tangible assets include both fixed assets, such as machinery, buildings and land, and current assets, such as inventory. Intangible Assets Intangible assets are defined as identifiable non-monetary assets that cannot be seen, touched or physically measured, and are created through time and effort, and are identifiable as a separate asset. Non-physical assets, such as patents, trademarks, copyrights, goodwill and brand recognition, are all examples of intangible assets. An intangible asset can be classified as either indefinite or definite depending on the specifics of that asset. Capital Work in Progress Capital work in progress is a function of two accounting terms: capital and work in progress. Companies use capital work in progress to track and account for uncompleted building and construction. It means construction in progress or capital work in progress which is not yet completed (typically, applied to capital budget items). It is thus a work that has not been

completed but has already incurred a capital investment. A CIP item is not depreciated until the asset is placed in service. Normally, upon completion, a CIP item is reclassified, and the reclassified asset is capitalized and depreciated. Intangible assets under development Intangible assets under development relates mainly relates mainly to software development. They may also be related to location development rights, deed restrictions and similar assets. It can be explained by the following example. Say an organization has applied for patent of any product that it has invented and the approval is still pending. Hence it can be a situation of intangible assets under development. Miscellaneous expenses not written off A company spends money on various things. If money spent is sizeable and can be given a name as per materiality concept, it can be shown separately. But if money spent on petty things, they can be grouped and shown under Miscellaneous Expense. If the benefit of these expenses is receivable over a period of time, this amount can be written off in parts. The amount which is yet to be written off can be shown as Misc Expenses not written off. Contingent Liability A contingent liability is a potential liability. It depends on a future event occurring or not occurring. For example, if a parent guarantees a daughters first car loan, the parent has a contingent liability. If the daughter makes her car payments and pays off the loan, the parent will have no liability. If the daughter fails to make the payments, the parent will have a liability. These liabilities are recorded in a company's accounts and shown in the balance sheet when both probable and reasonably estimable. A footnote to the balance sheet describes the nature and extent of the contingent liabilities. Deferred Tax Liability: An account on a company's balance sheet that is a result of temporary differences between the company's accounting and tax carrying values, the anticipated and enacted income tax rate, and estimated taxes payable for the current year. This liability may or may not be realized during any given year, which makes the deferred status appropriate. Because there are differences between what a company can deduct for tax and accounting purposes, there will be a difference between a company's taxable income and income before tax. A deferred tax liability records the fact that the company will, in the future, pay more

income tax because of a transaction that took place during the current period, such as an installment sale receivable. Deferred Tax Asset: It is an asset on a company's balance sheet that may be used to reduce any subsequent period's income tax expense. Deferred tax assets can arise due to net loss carryovers, which are only recorded as assets if it is deemed more likely than not that the asset will be used in future fiscal periods. It must be determined that there is more than a 50% probability that the company will have positive accounting income in the next fiscal period before the deferred tax asset can be applied. If, for example, a company has a deferred tax asset of $25,000 on its balance sheet, and then the company earns $75,000 in before-tax accounting income, accounting tax expense will be applied to $50,000 ($75,000 - $25,000), instead of $75,000. Activity Based Costing Activity based costing is a dynamic and systematic accounting methodology for realistically calculating the actual cost of doing business, regardless of organizational structure. ABC originated from the efforts of Dr. Robert Kaplan of Harvard, who also conceptualized the Balanced Scorecard. Proponents of ABC believe that the major thrusts of a company such as continuous process improvement and simplification to boost productivity can only be attained if the real cost and time required to produce its goods and services is determined. This will prevent indiscriminate cost-cutting measures (such as miscalculated downsizing) that may actually result in worse performance and profitability. ABC entails the complex task of identifying discrete activities and identifying the measure of output for each of these activities. Each activity also needs to be classified as either 'valueadded' or 'non-value-added.' Value-added activities are activities that add value to the product or service that the customer is willing to pay for. Thus, all steps required to manufacture a product or enhance its quality or reliability are value-added activities. On the other hand, nonvalue-added activities are activities that do not contribute any value to the final product, and are other activities that the customer doesn't really want to pay for. Staging of products and unnecessary inspection are examples of non-value-added activities. Non-value added activities, in general, must be eliminated if possible. Activity-based costing consists of the following steps:

1) Analysis of activities; 2) Cost data gathering; 3) Tracing of costs to activities; 4) Establishment of output metrics; and 5) Cost analysis. A Real World Example Sam-Mart Produce Department: a) Continually dumps produce due to spoilage b) Has difficulty keeping its stock current c) Must reduce spoilage costs