04-05-2011, 03:47 PM
Agreed with the above answer!!!
Oppourtunity cost is computed for decision making.....
thats y financial manangement and financial accouting are two different areas!! )
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by moniacca</i>
<br /><blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by mashfaq</i>
<br />Why opportunity cost is not recognized while calculating the accounting profit? I need some logical reasons ( In the light of accounting standards or applications) . I also know that it is the implicit cost
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Financial statements are prepared on accrual basis. Opportunity cost is not the cost that is actually incured and/or does not relates to the period for which financial statements are prepared. So opportunity costs are not recognized while calculating the accounitng profits.
I hope my reply will help you.
Comments are appreciated.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Oppourtunity cost is computed for decision making.....
thats y financial manangement and financial accouting are two different areas!! )
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by moniacca</i>
<br /><blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by mashfaq</i>
<br />Why opportunity cost is not recognized while calculating the accounting profit? I need some logical reasons ( In the light of accounting standards or applications) . I also know that it is the implicit cost
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Financial statements are prepared on accrual basis. Opportunity cost is not the cost that is actually incured and/or does not relates to the period for which financial statements are prepared. So opportunity costs are not recognized while calculating the accounitng profits.
I hope my reply will help you.
Comments are appreciated.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">