Accounting Definitions

* Book value:
1. The value at which an asset is carried on a balance sheet. To calculate, take the cost of an asset minus the accumulated depreciation.
2. Tangible assets-liabilities= book valueof a company
* Accumulated depreciation:
The cumulative depreciation of an asset up to a single point in its life. Regardless of the method used to calculate it, the depreciation of anasset during a single period is added to the previous period’s accumulated depreciation to get the current accumulated depreciation. 
* Goodwill:
Goodwill is seen as an intangible asset on thebalance sheet because it is not a physical asset such as buildings and equipment. Goodwill typically reflects the value of intangible assets such as a strong brand name, good customer relations, goodemployee relations and any patents or proprietary technology.
* Deferred charges:
A prepaid expense that is treated as an asset on a balance sheet and is carried forward until it is actuallyused. Deferred charges often stem from a business making a payment for a good or service that it has not yet received, such as the prepaying of insurance premiums or rent. A company may pay for a yearof rent in advance, for example, to receive more favorable terms; this advanced payment is recorded as a deferred charge on the balance sheet. Each month, the company can then use a portion of thefunds in its deferred charges account and recognize this amount as an expense on any financial statements.
* Cost flow assumptions regarding inventories (FIFO, LIFO, Average cost method andspecific identification method):
The inventory cost flow assumption is the concept that the cost of an inventory item changes between the time it is acquired or built and the time when it is sold.Because of this cost differential, a company needs to adopt a cost flow assumption regarding how it treats the cost of goods as they move through the company.
For example, ABC International buys a...