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  Reasons for Disagreement in Profit between Cost and Financial Accounts The profit shown by Cost Accounts and Financial Accounts may differ due to several reasons: 1. Items shown only in Financial Accounts These items are recorded in financial accounts but not considered in cost accounts , e.g.: Purely financial incomes: Interest received, Dividend received, Rent received, Profit on sale of assets, etc. Purely financial expenses: Loss on sale of assets, Interest on loans/debentures, Goodwill written off, Preliminary expenses written off, Income tax, Donations, etc. 2. Items shown only in Cost Accounts Certain notional costs are considered only in cost accounts for decision-making, e.g.: Notional rent of own building. Notional interest on capital employed. Depreciation charged at a higher/different rate in cost books. 3. Difference in Overheads Charged In cost accounts, overheads are absorbed based on predetermined rates (machine hour, labour hour...

  LEAVE ENCASHMENT (Sec 10[10AA] ·          Leave encashment is the process of receiving money for unused paid leave accumulated by an employee. ·          Employees are entitled to a minimum number of paid leaves annually, and many employers allow these unutilised leaves to be carried forward. ·          Upon retirement or resignation, employers are typically obligated to compensate employees for their accumulated, unutilized paid leave, which is known as leave encashment. TAX TREATEMENT I. Leave Encashment Received During the Period of Service: It is fully taxable. II. Leave Encashment Received on Retirement (Superannuation or Otherwise): A. By a Government Employee:                Fully exempt under Section 10 ( 10 AA)(i) of the Income Tax Act. B. By Any Other Employee...

CLASS :III BCOM GEN SUBJECT : Fundamentals of Stock Market Unit: 3 Topic : Derivative Market, Commodity Market and Currency Market Course Teacher : G.Vincent, Associate Professor,SRM IST,Tiruchirappalli Campus   Derivative- Definition A  derivative  is a financial contract whose value is  derived  from the performance of an underlying asset, group of assets, or benchmark. A derivative itself has no intrinsic value; it is essentially a bet or a contract on the future price movement of something else. The "Underlying Asset" The "something else" that a derivative is based on is called the  underlying asset . This can be almost anything that has a fluctuating value, including: Equities:  Individual stocks (e.g., Apple Inc.) or stock market indices (e.g., the S&P 500). Commodities:  Raw materials like crude oil, gold, wheat, and natural gas. Currencies:  Foreign exchange rates (e.g., EUR/USD). Interest...