Management of fixed assets

[edit] Depreciation

Depreciation is the decrease in the value of an asset due to wear and tear or obsolescence. It is calculated yearly to ensure realistic book values for assets.

[edit] Insurance

Main article: Insurance

Insurance is the undertaking of one party to indemnify another, in exchange for a premium, against a certain eventuality.

Uninsurable risks

* Bad debt
* Changes in fashion
* Time lapses between ordering and delivery
* New machinery or technology
* Different prices at different places

Requirements of an insurance contract

* Insurable interest
o The insured must derive a real financial gain from that which he is insuring, or stand to lose if it is destroyed or lost.
o The item must belong to the insured.
o One person may take out insurance on the life of another if the second party owes the first money.
o Must be some person or item which can, legally, be insured.
o The insured must have a legal claim to that which he is insuring.
* Good faith
o Uberrimae fidei refers to absolute honesty and must characterise the dealings of both the insurer and the insured.

[edit] Shared Services

There is currently a move towards converging and consolidating Finance provisions into shared services within an organization. Rather than an organization having a number of separate Finance departments performing the same tasks from different locations a more centralized version can be created.

[edit] Finance of states

Main article: Public finance

Country, state, county, city or municipality finance is called public finance. It is concerned with

* Identification of required expenditure of a public sector entity
* Source(s) of that entity's revenue
* The budgeting process
* Debt issuance (municipal bonds) for public works projects

[edit] Financial economics

Main article: Financial economics

Financial economics is the branch of economics studying the interrelation of financial variables, such as prices, interest rates and shares, as opposed to those concerning the real economy. Financial economics concentrates on influences of real economic variables on financial ones, in contrast to pure finance.

It studies:

* Valuation - Determination of the fair value of an asset
o How risky is the asset? (identification of the asset appropriate discount rate)
o What cash flows will it produce? (discounting of relevant cash flows)
o How does the market price compare to similar assets? (relative valuation)
o Are the cash flows dependent on some other asset or event? (derivatives, contingent claim valuation)

* Financial markets and instruments
o Commodities - topics
o Stocks - topics
o Bonds - topics
o Money market instruments- topics
o Derivatives - topics

* Financial institutions and regulation

Financial Econometrics is the branch of Financial Economics that uses econometric techniques to parameterise the relationships.

[edit] Financial mathematics

Main article: Financial mathematics

Financial mathematics is a main branch of applied mathematics concerned with the financial markets. Financial mathematics is the study of financial data with the tools of mathematics, mainly statistics. Such data can be movements of securities—stocks and bonds etc.—and their relations. Another large subfield is insurance mathematics.

[edit] Experimental finance

Main article: Experimental finance

Experimental finance aims to establish different market settings and environments to observe experimentally and provide a lens through which science can analyze agents' behavior and the resulting characteristics of trading flows, information diffusion and aggregation, price setting mechanisms, and returns processes. Researchers in experimental finance can study to what extent existing financial economics theory makes valid predictions, and attempt to discover new principles on which such theory can be extended. Research may proceed by conducting trading simulations or by establishing and studying the behaviour of people in artificial competitive market-like settings.