Lem Stand Notes

Foreign currency valuation is essential for businesses that operate in multiple currencies or have transactions in foreign currencies. It involves: Exchange Rate Maintenance: Maintaining exchange rates for various currencies. Valuation Methods: Selecting appropriate valuation methods (e.g., average rate, last rate, exchange rate at closing) for different types of transactions. Valuation Runs: Periodically revaluing foreign currency-denominated assets and liabilities to reflect changes in exchange rates. Reporting: Generating reports on foreign currency gains and losses, currency exposures, and other relevant information. Key points to remember about SAP Foreign Currency Valuation: Integrated Functionality: Foreign currency valuation is deeply integrated into the core functionalities of SAP FI, such as accounts receivable, accounts payable, and asset accounting. Customization: The system can be customized to meet the specific requirements of different industries and busines...

SAP Withholding Tax Setup & Process is a crucial aspect of SAP FI (Financial Accounting) and is essential for businesses operating in jurisdictions with withholding tax requirements. Withholding tax is a tax levied on certain types of payments, such as interest, dividends, and royalties. It's often deducted at the source by the payer (e.g., a company) and remitted to the tax authorities. Key components of SAP Withholding Tax Setup & Process include: Master Data Setup: Configuring withholding tax codes, tax types, and relevant tax rates. Tax Determination: Setting up rules to determine the applicable withholding tax rate based on various criteria (e.g., payer, payee, payment type). Payment Processing: Integrating withholding tax calculations into payment processes to ensure accurate deductions. Reporting: Generating reports on withheld taxes, tax returns, and other relevant information. Learning SAP Withholding Tax Setup & Process is essential for: Compliance: ...

~ In the bar example per accrual where - the bar provides the service before receiving the money. They accrue the expense when the service is provided, even though payment hasn't been received yet.)  How do these three terms figure? Scenario: A customer orders a drink at a bar, consumes it, and agrees to pay later. Booked: When the bartender records the drink order on the customer's tab, it's essentially "booked" as an expense. This might be recorded in a sales journal or directly in the inventory system (if the bar tracks inventory of drinks). Recognized: The expense is "recognized" when the customer consumes the drink. This is because the performance obligation (providing the drink) has been fulfilled. The bar would record a debit to Cost of Goods Sold (or a similar expense account) and a credit to Inventory. Posted: At the end of the day or accounting period, the bar would "post" these transactions to the general ledger. This means tr...

 ~ No. My cake slice illustration for ETFs - which is not original with me - is as follows: I have a cake, perhaps of a rectangular shape, with all sorts of logos of companies on the top, made via frosting and such. So you may see the Apple logo on one corner, the google logo, sun microsystems logo, amazon logo in the middle, Aeropostale logo, or Pepsi and so on. All these are on the top of the cake and made via icing, frosting, etc.  Now if I cut a rectangular slice from one corner of the cake, which has a logo of say, Apple, on it, then it is as if I got ( = purchased) shares of Apple.  On the other hand, if I took a cross-sectional slice of the entire cake, from one side to the other, then I get a bit of all the companies, Apple, Amazon, Pepsi, etc. In this large but very thin slice, I get diversity. This slice is an etf.  ChatGPT>   That’s a great illustration! Your cake analogy effectively communicates the concept of ETFs versus individual stocks. H...

 I. How companies raise money   A. Get money it does not have to return (i.e. Equity Financing)     i. Full Ownership vs. Shared Ownership       a. Car being co-owned illustration of Shared Ownership       b. Baseball cards being owned illustration of full ownership       c. A stock share being owned - Shared Ownership       d. A similarity - the Capital Gains idea       e. Differences between Shared & Full Ownership (e.g. risk, liquidity, profit sharing, etc.)   B. Get money it has to return (i.e. Debt Financing)     i. Bonds akin to bank loans illustration       a. Similarities & Differences   C. They make money, of which, some is retained for future use or distribution (dividends).     i. A company typically handles the money it makes in two ways: It either retains the money to reinvest in the business or gives some of it out to sharehold...

 ~ Work on this later. A company can do two things with its earnings. Just two. Yes, massive companies like IBM, Microsoft, Pepsi, can only do two things with all the money that they make.  One is give it out as dividends and the other is keep it, aka, retain it. Retained Earnings: This is money the company makes from its operations, which it can either keep (retain) for future use or distribute to shareholders as dividends. ChatGPT>  "A company generally handles its earnings in two main ways: it either retains the funds to reinvest in the business or distributes some of them to shareholders as dividends."

 ~ I want to explain Capital Gains (CG) using the car analogy/illustration if possible.  We know that with many a tangible asset, in particular a collectible, like a comic book or a baseball card, there is an element similar to CG. Overtime, a comic book increases in value. Like so a baseball card, and especially so, if it is of a famous player. Overtime, a share of ABC Company also increases in value - let us assume for the sake of simplicity, that ABC Co., is doing well in business.  Now, all things being equal, if ABC is doing well, then its share value should increase. This is called CG. However unlike a baseball card, which also increases in value, you get something additional here. You also get dividends. Is what I say right so far. A one paragraph affirmation is fine, since I want to explain something else also. ChatGPT>    Yes, you're on the right track. Capital Gains (CG) refer to the increase in the value of an asset, such as a stock, over time. Jus...

 ~ For a lot of people, who are new to personal finance and investing, the concept of owning a stock, is an abstract idea. For example, it makes sense that I might own a car or my new pair of shoes or a a book, however the idea of owning Boeing Co., or owning a part of Pepsi Co., is for many people and abstract idea. I mean, quite often, when we own something, we tend to think that we can do whatever we want with that something. If I own the book, Robinson Crusoe, I can throw it in the garbage if I want to or give it away. Perhaps the abstractness stems from conflating full ownership and partial ownership, as in the shares of Pepsi Co. I'm wondering if I can come up with a way to explain Stock Market ownership to people, in a way so as to remove the abstractness. And here's the idea that I am working on: Perhaps we can say that if two people buy a car together a husband and a wife, or two room-mates, then we can say then each owns 50% of the car. Now if 5,000 people buy the sam...

 ~ Suppose I go to a bar and buy a drink? If I pay right there and then, then this would be an example of Cash Basis accounting. On the other hand, if I tell the bartender to put it on my tab, then I have Accrual Accounting.  GEM> That's a great example! Cash Basis Accounting: Paying for the beer immediately would be cash basis accounting. You're recognizing the expense (the cost of the beer) at the same time you're paying for it. Accrual Basis Accounting: Telling the bartender to put it on your tab would be accrual basis accounting. You're incurring the expense (the cost of the beer) when you consume it, even though you won't pay for it until later. The bar would then record this as an account receivable on their balance sheet. In essence, the difference lies in when the expense is recognized. With cash basis, it's when you pay. With accrual basis, it's when you consume the good or service. ~ And just to be sure. telling the bartender to put it on your t...