week 2 topic 2 post review Review Post minimum of 150 words APA Format

review post minimum of 150 words apa format

Clinton

“The time value of money (TVM) is an important concept to investors because a dollar on hand today is worth more than a dollar promised in the future; the dollar on hand today can be used to invest and earn interest or capital gains. A dollar promised in the future is actually worth less than a dollar today because of inflation (Investopedia, 2015).”

If my manager told me that the time value of money is just a waste of time, then I would stop, explain to my manager that the reason you are in the position of managing this business is due completely to that theory. The dollar if not recognized today can hurt you tomorrow, and failing to accept that theory will result in either raising or lowering the numbers on the Financial Statements, possibly forcing financial institutes to refuse that loan needed for an expansion. Failing to follow the time value of money is also failing to follow the standards of GAAP; in return, this can create audits, red flags, or even denial of funds. The dollar will make you or break you if not handled properly. GAAP is continuously changing the amendments in order to adjust to the changing world, creating new rules and regulation moving towards the present value and the fair value of money.

References

Concepts Based on Time Value of Money in Accounting and Business Applications. (n.d.). Retrieved May 16, 2017, from https://accounting-finance.knoji.com/concepts-based-on-time-value-of-money-in-accounting-and-business-applications/

Financial Accounting Foundation. (n.d.). 326 Financial Instruments—Credit Losses > 20 Measured at Amortized Cost > 55 Implementation. Retrieved from: https://asc.fasb.org/section&trid=49130398&search_marker=searchresult&query=dGltZSB2YWx1ZSBvZiBtb25leQ==

Time Value of Money. (n.d.). Retrieved May 16, 2017, from http://accounting-simplified.com/management/investment-appraisal/time-value-of-money.html

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