Simply put, it is the difference of amount of Tax Payable between tax computed as per Income Tax Act and as per Companies Act. It can be for many reasons, one of them being depreciation, which is treated differently in these two acts.

As per definitions given in AS-18 (Related Party Disclosures):-

Related Party – parties are considered to be related if at any
time during the reporting period one party has the ability to
control the other party or exercise significant influence over the
other party in making financial and/or operating decisions.

Related Party Transaction – a transfer of resources or obligations
between related parties, regardless of whether or not a price is
charged.

EPS stands for Earning per Share. It is the net profit after taxes/distributable profits for equity shareholders.

The total amount of such profits when divided by the total amount of outstanding shares gives us the Earning per each outstanding share.

Goodwill is an intangible asset and is simply the reputation of a business. It is generally not measurable in monetary terms.

In accounting, it is valued at the time when there is an amalgamation of 2 or more enterprises and payment made is in excess of the purchase consideration.

In the context of mutual funds, NAV per share is computed once a day based on the closing market prices of the securities in the fund’s portfolio. All mutual funds’ buy and sell orders are processed at the NAV of the trade date. However, investors must wait until the following day to get the trade price. Mutual funds pay out virtually all of their income and capital gains. As a result, changes in NAV are not the best gauge of mutual fund performance, which is best measured by annual total return. Because ETFs and closed-end funds trade like stocks, their shares trade at market value, which can be a dollar value above (trading at a premium) or below (trading at a discount) NAV.

Mercantilism was an economic theory and practice, dominant in Europe from the 16th to the 18th century, that promoted governmental regulation of a nation’s economy for the purpose of augmenting state power at the expense of rival national powers. It is the economic counterpart of political absolutism. Mercantilism includes a national economic policy aimed at accumulating monetary reserves through a positive balance of trade, especially of finished goods. Historically, such policies frequently led to war and also motivated colonial expansion. The Mercantilism theory varies in sophistication from one writer to another and has evolved over time. High tariffs, especially on manufactured goods, are an almost universal feature of mercantilism policy. Other policies have included:

• Building overseas colonies;
• Forbidding colonies to trade with other nations;
• Monopolizing markets with staple ports;
• Banning the export of gold and silver, even for payments;
• Forbidding trade to be carried in foreign ships;
• Export subsidies;
• Promoting manufacturing with research or direct subsidies;
• Limiting wages;
• Maximizing the use of domestic resources;
• Restricting domestic consumption with non-tariff barriers to trade.

Mercantilism in its simplest form is bullionism, but mercantilist writers have emphasized the circulation of money and reject hoarding. Their emphasis on monetary metals accords with current ideas regarding the money supply, such as the stimulative effect of a growing money supply. Specie concerns have since been rendered moot by fiat money and floating exchange rates. In time, the heavy emphasis on money was supplanted by industrial policy, accompanied by a shift in focus from the capacity to carry on wars to promoting general prosperity. Mature neo-mercantilist theory recommends selective high tariffs for “infant” industries or to promote the mutual growth of countries through national industrial specialization

For further detailes, go to – http://en.wikipedia.org/wiki/Mercantilism

Double Entry basically refers to the DUAL ASPECT of a single entry , namely DEBIT & CREDIT. Any entry that we do, has a Debit side and a Credit side..
The practice of double entry has its foundations based on the three basic principles of Accounting, which are:-
1. In case of Real Accounts, Debit what comes in, Credit what goes out.
2. In case of Nominal Accounts, Debit the Expenses/Losses, Credit all Receipts/Incomes.
3. In case of Personal Accounts, Debit the Receiver, Credit the Giver.
By fully understanding these three basic principles of accounting, one can successfully understand and implement Double Entry Accounting.
For eg.,
1. Purchase of goods will be entered as, “Debit Purchases A/C & Credit the name of party from whom we have purchased goods.”
2.  Payment for the goods purchased will be entered as, ” Debit the name of the party & Credit Cash/Bank A/C”

Well, CFS is a statement that is prepared to know the CASH PROFITS or LOSSES for a year, using the net profit as per the P&L Acc. It also represents the increase or decrease in the liquid funds lying with the company (including cash & bank balance and liquid marketable securities).

1. First of all, we add back all the NON-CASH EXPENSES (eg. Depreciation) and subtract all the NON-CASH INCOMES (eg. Interest Receivable.) to/from the net profit as per P&L Acc.

2. Now, Increase or decrease in cash and cash equivalents may result due to 3 kinds of activities, namely OPERATING, INVESTING & FINANCING.

3. Operating Activities are the day to day operations of the business. And the cash effect of such operations is used to determine whether the operations of the business have resulted in increase or decrease of cash balance. For eg., We add the amount increase in payables (because of low outflow) and subtract the increase in receivables (because of low inflow). So, additions mean INFLOW and subtractions mean OUTFLOW.
After all the additions and subtractions, we arrive at a figure that represents the “Net Cash Flow Due To Operating Activities”.

4. Then come the Investing Activities. These represent the cash effect of the investments made or redeemed (including the amounts of interest). We subtract the amount of new investments made (because it results in outflow) and we add the amount of investments redeemed or the interest receivable (because it results in inflow). After all the additions and subtractions, we arrive at a figure that represents the “Net Cash Flow Due To Investing Activities”.

5. Now the 3rd kind of activity is the Financing Activity. This represents borrowing or repayment of funds (including interest). We add or subtract the amount of funds borrowed or repaid respectively. Now the resultant figure represents the “Net Cash Flow Due To Financing Activities”.

6. Then we sum up the Net cash flows from all the 3 activities and we arrive at the net increase or decrease in cash and cash equivalents. Adding in this, the opening balance of cash and cash equivalents (balance at the beginning of the year), we get the closing balance (balance at the end of the year).

P.S. you know you’ve prepared this statement correct if your closing balance tallies with that in the balance sheet. 🙂

Private Equity funds generally make highly concentrated bets on the equity of a few companies.  Although they had generally preferred to take complete control, in the bull market of 2006/2007 deals became so large that they were forced to do “club deals”, partnering with other firms to find enough capital to get a deal done.  Once they become owners of these portfolio companies, they generally work closely with management to improve operations in order to make the company more valuable.  They will pay themselves dividends over time, as possible, but the real money is made when either the company is sold or IPOs.

Hedge funds, on the other hand, make a broader set of short-term investments.  There are many strategies that are used (long/short equity, credit, macro, stat arb, etc) and trades can last from milliseconds to years.  Many hedge funds prefer to stay in relatively liquid securities so that they can trade out at any point in time to lock in their profits

As per Basic Principles of Accounting, there are two methods recognize income/revenue or expenses, i.e. on CASH basis or on ACCRUAL basis.

In ACCRUAL basis, income/revenue is recognized at the time of occurrence of sale transaction, irrespective of the fact of payment being received at the same time or some time later. For eg., A follows accrual basis of accounting in his business. He sells goods to B on 15/10/2014 but receives payment on 20/10/2014. Now, since he is following accrual method, he will record his sale transaction on 15th Oct. (i.e. as and when the transaction occurred), instead of 20th Oct. (i.e. as and when the payment is received.)

In CASH basis, income/revenue is recognized at the time of receipt of payment, irrespective of the time of occurrence of the sale transaction. Following the above example, if A follows cash basis of accounting then he will record the sale on 20th Oct, instead of 15th Oct. (at the time when he receives money for the goods sold).

The same concept can be followed for expenses too. There are times when we pay for expenses at a later date (usually in case of recurring or regular expenses directly associated with our business). In Cash basis, we record the expenses at the time when we pay for them, and in accrual basis we record expenses as and when they occur.

Cash method does a remarkable job in tracking cash flow because it records inflows and outflows as and when they occur. This feature is not found in accrual method of accounting.

Cash method is suitable for small scale enterprises.