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Why first year of operations of an enterprise which is lesser than 1 year is not considered as interim period?
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Why first year of operations of an enterprise which is lesser than 1 y...
Why first year of operations of an enterprise which is lesser than 1 year is not considered as interim period?
Reasons:
1. Lack of Comparability:
- The first year of operations for a new enterprise is often characterized by significant fluctuations and uncertainties in financial performance.
- As a result, financial statements for this period may not provide a reliable basis for comparison with subsequent periods.
2. Incomplete Data:
- During the initial year of operations, the enterprise may not have a full year's worth of financial data available.
- This incomplete data may not accurately reflect the true financial position and performance of the enterprise.
3. Limited Historical Trend:
- A single year of operations is not sufficient to establish a meaningful historical trend for the enterprise.
- Investors and stakeholders may prefer to analyze financial data over multiple periods to assess the long-term viability of the enterprise.
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Why first year of operations of an enterprise which is lesser than 1 year is not considered as interim period?
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Why first year of operations of an enterprise which is lesser than 1 year is not considered as interim period? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Why first year of operations of an enterprise which is lesser than 1 year is not considered as interim period? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Why first year of operations of an enterprise which is lesser than 1 year is not considered as interim period?.
Why first year of operations of an enterprise which is lesser than 1 year is not considered as interim period? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Why first year of operations of an enterprise which is lesser than 1 year is not considered as interim period? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Why first year of operations of an enterprise which is lesser than 1 year is not considered as interim period?.
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