All of the following are accounting factors that will cause a firm's value-to-book ratio to decrease over time EXCEPT:
a. recognizing unrealized gains on assets
b. a loss of competitive advantage through changes in technology or other factors
c. earning a high ROCE (above the equity cost of capital) on off-balance-sheet R&D assets
d. earning a high ROCE (above the equity cost of capital) on off-balance-sheet intangible assets (such as brand equity) over time

Respuesta :

Option c is correct. The only accounting considerations besides earning a high ROCE (above the equity cost of capital) on off-balance-sheet R&D assets that will lead a firm's value-to-book ratio to drop over time.

The legal system, the tax system, the source of financing, and culture are accounting factors. We refer to an accounting system as the accounting procedures a business employs to create its annual financial reporting.

Cost, managerial, and financial accounting are the three categories of accounting. Even while all three accounting systems are essential to the smooth operation of a company, they each have a unique purpose and significance.

A factor is a middleman who buys firms' receivables in order to supply them with cash or loans. In essence, a factor is a source of capital that consents to pay the business the amount of an invoice less a discount for commission and other costs.

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