Credit history of a person has a great impact on his/her financial profile, as it is used by banks, utility companies, employers, landlords etc. to determine the creditworthiness. So, it is important for one to be aware of his/her credit report and credit score, compiled by the credit reporting agencies, also known as credit bureaus. A credit report is a document which reflects the history of credit behaviour of a person. Based on the information on the credit report, a three digit number is … [Read more...]

When high net worth individuals or firms invest in the companies which are privately held or not listed on any stock exchange, is called Private Equity. On the other hand, Hedge fund implies a type of mutual fund that pools money of various high net worth individuals or firms into a variety of financial instruments, to generate good returns, with the help of different strategies and techniques. Both private equity and hedge fund are the forms of an investment fund that approach accredited … [Read more...]

ELSS is an open-ended equity mutual fund that not only provides tax saving but also gives an opportunity to the investor to grow money. Conversely, PPF refers to a type of Provident fund, which can be opened by any salaried or non-salaried person to park their money so as to reduce the tax burden. One of the major concerns of all the taxpayers is to reduce the tax liability as much as possible. And for this purpose, they take recourse of various deductions under the Income-tax Act, 1961. … [Read more...]

Divestiture or commonly called as divestment is the process of selling off a part or division of the company to another company or creating a separate company. Divestiture can take the form of the spin-off, split-off, split-up, sell-off, equity carve-out, etc. Of these forms, the two commonly juxtaposed forms of divestiture are spin-off and split-off. Spin-off refers to the business division, which becomes an independent undertaking, after separation from the parent company. On the contrary, … [Read more...]

The stock market has two segments, i.e. primary market and secondary market. In the secondary market, buying and selling of originally issued securities take place. The participants of secondary market are classified as traders, investors and speculators.There is a thin line of demarcation between trading and investing which lies in the intention of the participant while spending money, i.e. an investor invest money with a certain view in mind regarding the return, or the output generated. On … [Read more...]

In accounting, the financial transactions are recorded, processed and presented to generate financial statements, that is useful to the readers, in making decisions. Traditionally, accounting is done manually, by a trained accountant, with the use of registers, account books, vouchers etc. But with the emerging technology, nowadays, computerized accounting is in vogue, due to its accuracy, convenience and speed. Both manual and computerized system is based on the same principles, conventions … [Read more...]

Accounting is a business language, which is used to communicate financial information to the company's stakeholders, regarding the performance, profitability and position of the enterprise and help them in rational decision making. The financial statement is based on various concepts and conventions. Accounting concepts are the fundamental accounting assumptions that act as a foundation for recording business transactions and preparation of final accounts. On the other extreme, accounting … [Read more...]

When there is a profit from the sale or transfer of a capital asset such as building, car, jewellery, shares, etc. it is known as capital gain, which is taxable under the Income Tax Act, as it is regarded as the income of the previous year in which the transfer occurs. It can be short-term capital gain or long-term capital gain. The short-term capital gain refers to the profit earned by an individual on account of the transfer of the short-term capital asset. On the other extreme, when a … [Read more...]

To invite general public, for subscribing the shares of a company, it makes a public issue, by way of an Initial Public Offering (IPO). However, when a company seeks to raise funds, without making a public issue, then it has the option of the private placement, wherein, the securities (shares and convertible debentures) are issued to private investors, not exceeding 200 members in a financial year. There are two kinds of the private placement, namely, preferential allotment and qualified … [Read more...]

The company's capital is divided into small shares of definite price; wherein each share is regarded as a unit of ownership, that is offered to the general public for sale, to raise funds from the market. It can be ordinary shares or preferred ones. The Companies Act provides that the subscribed capital of the companies can be increased, by issuing further shares to the existing shareholders at discounted prices, in the form of right shares. Contrary to this, when a company possess the huge … [Read more...]