What is the objective of accounting?

The main ​objectives of accounting are maintaining a complete and systematic record of all
transactions and analysing the financial position of a business. Every individual or a business
concern is interested to know the results of financial transactions and their results are ascertained
through the ​accounting​ process.

What are the objectives of financial statements?

The ​objective of financial statements is to provide information about the ​financial position,
performance and changes in ​financial position of an enterprise that is useful to a wide range of
users in making economic decisions (IASB Framework).

What are the objectives and functions of accounting?

Objectives of ​accounting in any business are; systematically record transactions, sort and
analyzing them, prepare financial statements, assessing the financial position, and aid in decision
making with financial data and information about the business.

What are the 5 components of financial statements?

The preparation of the financial statements is the summarizing phase of accounting. A complete
set of financial statements is made up of five components: ​Statement of Comprehensive
Income (SOCI)​, ​Statement of Changes in Equity (SOCIE)​, a ​Statement of Financial
Position (SOFP)​, a ​Statement of Cash Flows​, and ​Notes to Financial Statements​.

What are the 5 types of accounts?

There are five main types of accounts in accounting, namely ​assets​, ​liabilities​, ​equity​, ​revenue
and ​expenses​. Their role is to define how your company's money is spent or received. Each
category can be further broken down into several categories.

What are the two objectives of financial statement analysis?

(i) To assess the earning capacity or profitability of the firm. (ii) To assess the operational
efficiency and managerial effectiveness. (iii) To assess the short term as well as long term
solvency position of the firm. (iv) To identify the reasons for change in profitability and
financial​ position of the firm.

What is the three golden rules of accounting?

The following are the ​rules of debit and credit which guide the system of ​accounts​, they are
known as the ​Golden Rules of accountancy​: First: Debit what comes in, Credit what goes out.
Second: Debit all expenses and losses, Credit all incomes and gains. ​Third​: Debit the receiver,
Credit the giver.
What is financial record keeping?

financial records​. Formal documents representing the transactions of a business, individual or

other organization. ​Financial records maintained by most businesses include a statement of
retained earnings and cash flow, income statements and the company's balance sheet and tax
returns.

What are journal entries used for?

An ​accounting journal entry is the method ​used to enter an ​accounting transaction into the
accounting records of a business. The ​accounting records are aggregated into the general
ledger, or the ​journal entries may be recorded in a variety of sub-ledgers, which are later rolled
up into the general ledger.

What is the purpose of journal entries?

What Is the Purpose of a ​Journal Entry​? A ​journal is a record of transactions listed as they
occur that shows the specific accounts affected by the transaction. Used in a double-​entry
accounting system, ​journal entries​ require both a debit and a credit to complete each ​entry​.

What are types of journals?

Types of Journal in Accounting

● Purchase journal.
● Sales journal.
● Cash receipts journal.
● Cash payment/disbursement journal.
● Purchase return journal.
● Sales return journal.
● Journal proper/General journal.

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Objectives of Cost Accounting: Ascertainment of Cost, Control of

Cost, Determination of Selling Price and a Few Others
● Objectives of Cost Accounting – 6 Important Objectives: Ascertainment of
Cost, Fixation of Selling Price, Cost Control, Matching Cost with Revenue
and a Few Others

● Cost accounting was born to fulfill the needs of management of manufacturing and
service companies for a detailed information about the cost. Cost accounting is a
mechanism of accounting by means of which costs of services or products are ascertained
and controlled in a manufacturing firm for different purposes. The managerial skill and
abilities can be improved. The object of cost accounting is to ascertain the true cost of
every operation, through a close watch—cost analysis and allocation.
● The main objectives or purposes are as follows:

Objective # 1. Ascertainment of Cost:

● It enables the management to ascertain the cost of product, job, contract, service or unit
of production so as to develop cost standard. Costs may be ascertained, under different
circumstances, using one or more types of costing principles— standard costing,
marginal costing, uniform costing etc.

● Objective # 2. Fixation of Selling Price:

● Cost data is useful in the determination of selling price or quotations. Apart from cost
ascertainment, the cost accountant analyses the total Cost into fixed and variable costs.
This will help the management to fix the selling price; sometimes, below the total cost
but above the variable cost. This will increase the volume of sales—more sales than
previously, thus leading to maximum profit. The scientific way of reducing the prices is
possible in an industry only where a sound costing system exists. In other words, cost
reduction, in the absence of a costing system, may cause to shut down the industries.

● Objective # 3. Cost Control:

● The object is to minimise the cost of manufacturing. Comparison of actual cost with
standards reveals the discrepancies—variances. If the variances are adverse, the
management enters into investigation so as to adopt corrective action immediately.

● Objective # 4. Matching Cost with Revenue:

● The determination of profitability of each product, process, department etc. is the

important object of costing.

● Objective # 5. Special Cost Studies and Investigations:

● It undertakes special cost studies and investigations and these are the basis for the
management in decision-making or policies. This will also include pricing of new
products, contraction or expansion programmes, closing down or continuing a
department, product mix, price reduction in depression etc.

● Objective # 6. Preparation of Financial Statements, Profit and Loss Account,

Balance Sheet:

● To prepare these statements, the value of stock, work-in-progress, finished goods etc., are
essential; in the absence of the costing department, when we have to close the accounts it
rather takes too much time. But a good system of costing facilitates the preparation of the
 statements, as the figures are easily available; they can be prepared monthly or even
weekly.

Objectives of Cost Accounting – Top 11 Objectives

The main objectives of cost accounting are:
1. To ascertain cost of production of every unit, job, operation, process, department or service,
and to develop cost standards.
2. To indicate to the management any inefficiencies and the extent of various forms of waste,
whether of material, time, expense or in the use of machinery, equipment and tools. Analysis of
the causes of unsatisfactory results may indicate remedial action.
3. To reveal sources of economics after taking into account design of products and methods of
production, type of equipment, rate of output and layout of activities.
4. To disclose profitable and unprofitable activities so that steps can be taken to eliminate or
reduce those from which little or no profit is obtained or to change the method of production or
incidence of cost in order to render such activities more profitable.
5. To provide actual figures of cost for comparison with estimates and to assist the management
in their price-fixing policy.
6. To present comparative cost data for different periods and different volumes of production and
thereby assist the management in budgetary control.
7. To record and report to the concerned manager how actual costs compare with standard costs
and possible causes of differences (variances) between them.
8. To indicate the exact cause of increase or decrease in profit or loss shown by the financial
accounts.
9. To provide data for comparison of costs within the firm and also between similar firms.
10. To show the effect on profitability when a factory is not producing to full capacity.
11. To supply suitable cost data for managerial decision-making as regards expansion and
contraction of activities, making or buying of components, determining the break-even point,
dropping a product line, selecting the optimal sales-mix, shutting down of existing operations,
etc.

What is management accounting and its objectives?

The main ​objective of managerial ​accounting is to assist the ​management of a company in

efficiently performing ​its functions: planning, organizing, directing, and controlling.
Management accounting helps with these functions in the following ways: 1. Provides data: It
serves as a vital source of data for planning.

What is meant by management accounting?

Definition​: ​Management accounting​, also called ​managerial accounting or cost ​accounting​,
is the process of analyzing business costs and operations to prepare internal financial report,
records, and account to aid ​managers​' decision-making process in achieving business goals.

What are the objectives of management reporting?

The primary object of ​management reporting is to obtain the required information about the
operating results of the organization regularly in order to use them for further planning and
control.

What is the primary objective of managerial accounting?

The ​primary objective of managerial accounting is: To provide ​management with
information useful for planning and control of operations. Has no mandatory rules but guidelines
to meet the needs of decision makers within the firm.

What is management accounting functions?

Management Accounting is the presentation of ​accounting information in order to formulate

the policies to be adopted by the ​management and assist ​its day-to-day activities. In other
words, it helps the ​management to perform all ​its functions including planning, organising,
staffing, directing and controlling.

What are the objective of IFRS?

The goal or Objective of IFRS= to provide a global framework for how public companies
prepare and disclose their ​financial statements. IFRS provides general guidance for the
preparation of ​financial​ statements, rather than setting rules for industry-specific reporting.

What are the objectives of accounting standards?

The primary ​objective of Accounting Standards​ are:

To provide a ​standard for the diverse ​accounting policies and principles. To put an end to the
non-comparability of financial statements. To increase the reliability of the financial statements.
To provide ​standards​ which are transparent for users.

What is the concept of management accounting?

Definition​: ​Management accounting​, also called ​managerial accounting or cost ​accounting​,

is the process of analyzing business costs and operations to prepare internal financial report,
records, and account to aid ​managers​' decision-making process in achieving business goals.

What is mean by accounting standards?

An ​accounting standard is a common set of principles, ​standards and procedures that define
the basis of financial ​accounting policies and practices. ... In the United States, the Generally
Accepted ​Accounting Principles form the set of ​accounting standards widely accepted for
preparing financial statements.

The Difference Between Business Law and Corporate Law

While ​corporate law focuses on ​legal aspects governing sale and distribution of goods, ​business
law covers ​legal aspects used in acquisitions, mergers, formation of ​companies and rights of
shareholders. ​Companies​ need people who have in-depth knowledge of both ​laws​.

What do you mean by corporate law?

Corporate law deals the formation and operations of ​corporations and is related to commercial
and contract ​law​. A ​corporation is a ​legal entity created through the ​laws of its state of
incorporation, treating a ​corporation as a ​legal "person" that has standing to sue and be sued,
distinct from its stockholders.

Why is the company law important for a company?

If you imagine doing ​business without any legal means to protect your best interests, you'll
understand why the rule of ​law is ​important to ​business​. The rule of ​law gives everyone a
framework for how to act and operate. It holds people, businesses and government accountable
for their actions.

What is a company and types of companies?

Companies can be classified into different ​types based on their mode of incorporation, the
liability of the members, and number of the members. ... ​Companies Limited By Guarantee.
Unlimited ​Companies​. Public ​Company (or Public Limited ​Company​) Private ​Company (or
Private Limited ​Company​)

What is a company in law?

A ​company is a ​legal entity formed by a group of individuals to engage in and operate a
business​—commercial or industrial—enterprise. A ​company may be organized in various ways
for tax and financial liability purposes depending on the corporate ​law​ of its jurisdiction.

What are the types of company?

The most common types of companies are:

● Royal Chartered Companies.

● Statutory Companies.
● Registered or Incorporated Companies.
● Companies Limited by Shares.
● Companies Limited by Guarantee.
● Unlimited Companies.
 ● Public Company (or Public Limited Company)
● Private Company (or Private Limited Company)

What is IAS accounting?

International ​Accounting Standards (​IAS​) are older ​accounting standards issued by the
International ​Accounting Standards Board (IASB), an independent international standard-setting
body based in London. The ​IAS were replaced in 2001 by International Financial Reporting
Standards (​IFRS​).

Listing of IFRS & IAS (For Knowledge Perspective)

IFRS 1 First-time Adoption of International Financial Reporting Standards

IFRS 2 Share-based Payment

IFRS 3 Business Combinations

IFRS 4 Insurance Contracts

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

IFRS 6 Exploration for and Evaluation of Mineral Resources

IFRS 7 Financial Instruments: Disclosures

IFRS 8 Operating Segments

IFRS 9 Financial Instruments

IFRS 10 Consolidated Financial Statements

IFRS 11 Joint Arrangements

IFRS 12 Disclosure of Interests in Other Entities

IFRS 13 Fair Value Measurement

IFRS 14 Regulatory Deferral Accounts

IFRS 15 Revenue from Contracts with Customers

IFRS 16 Leases

IFRS 17 Insurance Contracts

IAS 1 Presentation of Financial Statements

IAS 2 Inventories

IAS 7 Statement of Cash Flows

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

IAS 10 Events after the Reporting Period

IAS 11 Construction Contracts

IAS 12 Income Taxes

IAS 16 Property, Plant and Equipment

IAS 17 Leases

IAS 18 Revenue

IAS 19 Employee Benefits

IAS 20 Accounting for Government Grants and Disclosure of Government Assistance

IAS 21 The Effects of Changes in Foreign Exchange Rates

IAS 23 Borrowing Costs

IAS 24 Related Party Disclosures

IAS 26 Accounting and Reporting by Retirement Benefit Plans

IAS 27 Separate Financial Statements

IAS 28 Investments in Associates and Joint Ventures

IAS 29 Financial Reporting in Hyperinflationary Economies

IAS 32 Financial Instruments: Presentation

IAS 33 Earnings per Share

IAS 34 Interim Financial Reporting

IAS 36 Impairment of Assets

IAS 37 Provisions, Contingent Liabilities and Contingent Assets

IAS 38 Intangible Assets

IAS 39 Financial Instruments: Recognition and Measurement

IAS 40 Investment Property

IAS 41 Agriculture

Why is IFRS important?

IFRS is ​important because it makes ​important elements involved in international trade
comparable and more transparent. International Trade has a ​major impact on the economy and
IFRS provides a unified method for the Accounting procedure that opens the door of new
opportunities for businesses and investors.

What are the IFRS principles?

IFRS standards are International Financial Reporting Standards (​IFRS​) that consist of a set of
accounting rules that determine how transactions and other accounting events are required to be
reported in financial statements.

What are the main objectives of IFRS?

Its principal objectives are:

● to develop, in the public interest, a single set of high quality, understandable, enforceable
and globally accepted international financial reporting standards (IFRS Standards) based
upon clearly articulated principles. ...
● to promote the use and rigorous application of those standards

What are the 4 principles of GAAP (Generally Accepted Accounting Principles)?

● The ​four​ basic constraints associated with ​GAAP​ include objectivity, materiality,
consistency and prudence.

How many countries use IFRS?

● More than ​120 nations and reporting jurisdictions permit or require IFRS for domestic
listed companies, although approximately 90 countries have fully conformed with IFRS
as promulgated by the IASB and include a statement acknowledging such conformity in
audit reports.

What is IFRS and its advantages?

● The importance of ​IFRS grew as they provide greater comparability of financial

information for investors and also encourage them to invest across borders. Studies show
that, ​IFRS adoption help in lowering ​the cost of capital for ​the companies and benefits
more efficient allocation of capital.

What is the IFRS conceptual framework?

 ● The ​Conceptual Framework sets out a comprehensive set of concepts for financial
reporting, standard setting, guidance for preparers in developing consistent accounting
policies and assistance to others in their efforts to understand and interpret the standards.

List of Accountancy Bodies worldwide:

https://en.wikipedia.org/wiki/List_of_accountancy_bodies

What is stock exchange simple definition?

A ​stock exchange​, share market or bourse is a place where people meet to buy and sell shares of
company ​stock​. Some ​stock exchanges are real places (like the New York ​Stock Exchange​),
others are virtual places (like the NASDAQ), Pakistan Stock Exchange etc.

What are the functions of stock exchange?

Some of the Important Functions of Stock Exchange/Secondary Market are listed below:

● Economic Barometer: ...

● Pricing of Securities: ...
● Safety of Transactions: ...
● Contributes to Economic Growth: ...
● Spreading of Equity Cult: ...
● Providing Scope for Speculation: ...
● Liquidity: ...
● Better Allocation of Capita

What is the importance of stock exchange?

The ​Stock exchange has an ​important role in the world economy by serving as the anchor of
the modern national economic system. ​Stock exchanges enable companies to raise funds for
expansion. They also give people a chance to make investments in corporations.

Meaning of Stock Exchange

A stock exchange is an important factor in the capital market. It is a secure place where trading is
done in a systematic way. Here, the securities are bought and sold as per well-structured rules
and regulations. Securities mentioned here includes debenture and share issued by a public
company that is correctly listed at the stock exchange, debenture and bonds issued by the
government bodies, municipal and public bodies.

Functions of Stock Exchange

Some of the significant objectives or functions of the Stock Exchange are listed below:
 1. Economic Barometer: A stock exchange is a solid barometer to gauge the economic
circumstance of a country. A stock exchange is also known as a pulse of the economy or
economic mirror which reflects the economic conditions of a country.
2. Pricing of Securities: ​The stock market helps to assess the securities on the basis of
demand and supply factors. The securities of effective and growth-oriented organisations
are estimated higher as there is more demand for such securities.
3. Safety of Transactions: ​In the stock market only the indexed securities are traded and
stock exchange authorities include the corporations named in the trade list only after
verifying the soundness of the organisation. The organisations which are listed also have
to function within the stringent rules and regulations. This guarantees the security of
dealing through the stock exchange.
4. Contributes to Economic Growth: ​In stock exchange securities of various organisations
are traded. This method of disinvestment and reinvestment helps to invest in the most
productive investment proposal and this leads to capital structure and economic growth.
5. Spreading of Equity Cult: ​Stock exchange urges people to invest in ownership
securities by managing new issues, better trading practices and by educating the people
about investment.
6. Providing Scope for Speculation: ​To assure liquidity and demand of supply of
securities the stock exchange allows healthy consideration of securities.
7. Liquidity: ​The principal purpose of the stock market is to present a ready market for sale
and purchase of securities. The presence of the stock exchange market gives certainty to
investors that their investment can be transformed into cash whenever they want.
8. Better Allocation of Capital: ​The shares of profit-making organisations are valued at
higher prices and are actively traded so such organisations can efficiently raise capital
from the stock market.
9. Promotes the Habits of Savings and Investment: ​The stock market gives attractive
chances for investment in different securities. These attractive opportunities inspire
people to save more and invest in securities of the corporate sector rather than investing
in unfruitful assets such as gold, silver, etc.,

Accounting Concepts and Principles

Core Accounting Concepts:
Two core accounting principles are entity and money measurement
Entity means a economic unit that performs economic activities. It may be a business entity –
any form of business i.e. sole proprietorship, partnership, company, co-operatives and
non-business organisations.
i. Entity concept​:
It sets out the principle that entity and its owners, who provided capital or otherwise became
owner as promoters, are distinct and separate. Any personal transactions of the owners cannot be
mixed up the transactions of the entity. This separation is fundamental to accounting.

ii. Money measurement concept​:

All transactions and events are measured in terms of monetary units. It can be the currency of
transactions. But for financial reporting it is to be translated into functional currency. Let us get
acquainted with the concepts of functional currency and presentation currency.
Functional currency is the currency of the primary economic environment in which the entity
operates.
Presentation currency is the currency in which the financial statements are presented.
Fundamental Accounting Assumptions:
i. Going concern​:
The enterprise is normally viewed as a going concern, that is, as continuing in operation for the
foreseeable future. It is assumed that the enterprise has neither the intention nor the necessity of
liquidation or of curtailing materially the scale of the operations.
While preparing financial statements, management shall make an assessment of an entity’s
ability to continue as a going concern. An entity shall prepare financial statements on a going
concern basis unless management either intends to liquidate the entity or to cease trading, or has
no realistic alternative but to do so.
The management may be aware of material uncertainties that create doubt on the ability of the
entity’s continuance as going concern. While pursuing going concern basis, it is necessary to
disclose those uncertainties.
The going concern assessment is normally based on the ability of the entity to continue for least
12 months from the end of the financial period.
ii. Consistency​:
It is assumed that accounting policies are consistent from one period to another.
Whereas IAS 1 Presentation of Financial Statements (which is part of IFRSs) talks about
Consistency of presentation. Presentation and classification of items of financial statements
should be maintained from one period to another. The change in presentation and classification is
made when there is a significant change in the nature of the entity’s operations. The change can
also be made when required by a standard or an interpretation. This is to facilitate comparison of
financial information over the accounting periods.

iii. Accrual:
Revenues and costs are accrued, that is, recognised as they are earned or incurred (and not as
money is received or paid) and recorded in the financial statements of the periods to which they
relate.

Other Concepts:
Three other important accounting concepts are periodicity, matching and realisation:
Periodicity: Normally an entity has infinite or very long life. But the stakeholders would require
to know the financial performance, financial position and cash flow of the entity more
frequently.
The appropriate frequency of releasing financial statements has been developed taking into
consideration cost of preparation and timeliness of the information. Any financial information
which is released very late would lose its relevance. The usual periodicity of releasing financial
statements is one year. However, listed companies are required to provide additional quarterly
financial information.
IAS 1 Preparation and Presentation of Financial Statements (issued by the International
Accounting Standards Board, IASB) states that financial statements shall be presented at least
annually. If an entity changes its balance sheet, it may have longer or shorter accounting period
for more than one year. Similarly, a newly established company may have its first accounting
period shorter or longer than one year. The management has to explain the reasons for choosing
an accounting period longer or shorter than one year.
1. Matching concept:
It is a relevant concept for the preparation of profit and loss account. While preparing profit and
loss account (income statement) expenses are matched with revenue. Matching is a process in
which expenses are recognised in the income statement on the basis of a direct association
between the costs incurred and the earning of specific items of income.
There are two types of expenses – direct expenses which are directly related to revenue and
indirect expenses which are periodic expense. This principle guides that expenses should be
matched with revenues. When expenses are matched with revenues, they are not recognized until
the associated revenue is also recognized.
In sale of goods, direct expenses are cost of goods sold. Direct expenses incurred for earning the
revenue is matched while valuation of cost of goods sold and indirect or periodic expenses are
matched on the basis of accounting period.
ii. Realization Concept:
This concept signifies that accounts recognise transactions (and any profit or loss arising from
them) at the point of sale or transfer of legal ownership-rather than just when valuation changes.
iii. Conservatism (also termed as prudence):
In view of the uncertainty attached to future events, profits are not anticipated but recognised
only when realised though not necessarily in cash. Provision is made for all known liabilities and
losses even though the amount cannot be determined with certainty and represents only a best
estimate in the light of available information.

Accounting Principles relating to Selection of Accounting Policies:

Accounting policies are specific accounting principles and the methods of applying those
principles adopted by an entity in the preparation and presentation of financial statements
The choice of the appropriate accounting principles and the methods of applying those principles
in the specific circumstances of each entity calls for considerable judgment by the management
of the entity.
Normally, three principles provide guidance to the entity:
i. Prudence:
In view of the uncertainty attached to future events, profits are not anticipated but recognised
only when realised though not necessarily in cash. Provision is made for all known liabilities and
losses even though the amount cannot be determined with certainty and represents only a best
estimate in the light of available information.
ii. Substance over form:
The accounting treatment and presentation in financial statements of transactions and events
should be governed by their substance and not merely by the legal form.
iii. Materiality:
Financial statements should disclose all material items, i.e. items the knowledge of which might
influence the decisions of the user of the financial statements.

What is the historical cost convention?

Historical Cost Accounting Convention​. In ​accounting​, the practice of recording the

historical cost of an asset as its ​cost on a balance sheet. Under the ​Accounting Principles, the
historical cost​ is the original ​cost​ of an asset that the buyer paid.

Why historical cost is important?

The concept of ​historical cost is important because market values change so often that allowing
reporting of assets and liabilities at current values would distort the whole fabric of accounting,
impair comparability and makes accounting information unreliable.

Which is better fair value or historical cost?

Historical cost is the transaction price or the acquisition price at which asset was acquired or
transaction was done, while ​Fair value is the market price that asset can fetch from the
counterparty. ... However, ​Fair value​-based accounting helps ​better​ comparability.

Is book value same as historical cost?

The term ​book value is derived from the accounting practice of recording asset ​value based
upon the original ​historical cost in the ​books​. ​Book value can refer to several different financial
figures while carrying ​value is used in business accounting and is typically differentiated from
market ​value​.

What is the concept of capital maintenance?

The ​capital maintenance concept states that a profit should not be recognized unless a business
has at least maintained the amount of its net assets during an accounting period. Stated
differently, this means that profit is essentially the increase in net assets during a period.
Capital maintenance, also known as capital recovery, is an accounting concept based on the
principle that a company's income should only be recognized after it has fully recovered its costs
or its capital has been maintained. ... Any excess amount above this represents the company's
profit.

Definition. ​Current Purchasing Power Method (C.P.P.) is also known as General Price-Level
Accounting​. ... This is a mixed method in which financial statements are prepared on a historical
basis these statements, in the end, are converted on the ​current purchasing power of the
currency.
What do you mean by current cost accounting?
Definition​. The financial ​accounting term ​current cost accounting refers to an approach that
values assets at their fair market value rather than ​historical cost​. In practice, ​current costs can
be determined in a number of ways, including applying a specific price index to the book value
of the asset.

What is the difference between fair market value and replacement value?

Market value is the estimated price at which your property would be sold on the open ​market
between a willing buyer and a willing seller under all conditions for a ​fair sale. ​Replacement
cost is the estimated cost to construct, at current ​prices​, a building with equal utility to the
building being appraised.

Fair value is a broad measure of an asset's ​worth and is not the same as market ​value​, which
refers to the price of an asset in the marketplace. In accounting, ​fair value is a reference to the
estimated ​worth of a ​company's assets and liabilities that are listed on a ​company's financial
statement.

Fair market value is the number that reflects what the ​business would be valued in a sale
between a buyer and seller who both have full knowledge of the facts and are under no duress.
Basically, it's the number that you'd expect to see if you put your ​business out into the
marketplace.