Essays on Financial Accounting

The Financial Accounting Standards Board (FASB) is an independent body which was formed with the intent to develop and improve the generally accepted accounting principles in the United States (Financial, 2017). The financial accounting guidelines and reporting standards promulgated by this body are aimed at protecting the interest of the public, as per order by the Securities and Exchange Commission. The FASB has a role in protecting the public interest, thus it shares a collective mission with with the FAF and the Governmental Accounting Standards Board (GASB). These agencies have a mission “to establish and improve financial accounting and ...

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Accounting Standard Setting under the Australian Conceptual Framework and Application in Business Practices

Introduction A conceptual framework establishes the concepts and provides the guidelines that underlie financial reporting. As a coherent system of notions that flow from an objective, which in turn serve to identify the purpose of financial reporting, a conceptual framework also provides guidance on the identification of the boundaries of financial reporting. Its concepts further provide guidance on the selection of transactions, related events, and circumstances to be presented, and how such elements should be summarized and ultimately reported (Financial Accounting Standards Board [FASB], 2008). One such conceptual ...

An Overview of the Standard-Setting Industry And Its History

Introduction Accounting Standards have been in existence since the beginning of the recorded history. Some of these standards were set up by rulers or reigning kings. However, as the world developed, States started coming up with bodies aimed at controlling the quality and standards of products and services in the accounting sector. In the ancient world, the man used to come up with standards with a desire of harmonizing his activities with important changes in the environment. Some standards were also set in response to a rise in needs in the society. The standard setting body in America was ...

Two distinct set of financial reports are used in managing a company, one made by Financial Accountants and the other by Managerial Accountants. These reports are aimed at the company’s external stakeholders such as investors and creditors and are prepared for each quarter and at the end of the financial year and. The format and content of these reports are laid down in laws such as the SOX (Sarbanes- Oxley) Act and in accounting regulations such as the GAAP (Generally Accepted Accounting Principles) and the IFRS (International Financial Reporting Standards). Financial reports become comparable across companies. Managerial accounting ...

In theory, financial accounting and reporting should be objective and neutral. However, the standard setting process can be a challenge as it is influenced by external factors and groups with different interests (Gaffikin, 2005). In different countries, financial accounting tends to be heavily regulated, with laws governing how particular transactions and events are to be recognized, measured and disclosed (Gaffikin, 2005). As such, the accounting process leads to the generation of general purpose financial reports. There are two approaches to the accounting regulation process, the regulated and non-regulated approach (Hossain, 2011). The non-regulated approach is also known as the ...

Both managerial and financial accountings have entirely different users. For instance, financial accounting helps organizations to present their financial status to various stakeholders like board of directors, investors and financial institutions. Financial accounting also presents the monetary details of an organization for a specific period in the past and helps the audience to understand how the company has performed during the above period. On the other hand, managerial accounting helps managers to take day to day business decisions. In other words, managerial accounting has nothing to do with the past performance of a business organization, but with the current ...

Compare and Contrast Financial and Managerial Accounting

Compare and Contrast Financial and Managerial Accounting

Introduction

In the current world, the environment in which companies operate has become more competitive, and this trend worsens by the day. As such, it has become imperative that firms focus more on advanced and sophisticated means of gathering accounting information for them to react as required towards market dynamics. In this consideration, it is important for these companies to employ proper accounting practices, which might either be financial, managerial or cost accounting (Hoffjan, Nevries, and Stienemann, n.d.). This paper will, however, focus on the first two. It will explore their similarities, differences ...

Income Tax Accounting

Income Tax Accounting

According to IAS 12, deferred tax asset is used to describe an asset that will minimize the amount of tax that a firm wishes to pay in a future accounting period. In the future, it can be used as a write off element when the next tax period is projected to produce increased earnings. The IAS 12 offers that the difference in tax bases for an asset and deductible temporary difference is what creates a deferred tax asset. It implies that the future cash flows are significant. The taxes are usually plowed back into the business ...

Generally Accepted Accounting Principles (GAAP)

GAAP refer to accounting principles geared towards guiding firms in the preparation of financial statements through adherence to stipulated financial processes. GAAP incorporates authoritative standards, which are developed by numerous that facilitate the recording and reporting processes of financial accounting information (Barth et al., 2012: Kothari et al., 2010). The adoption of GAAP remains critical to firms as it promotes the efficiency of communicating financial information within the internal and external business environments. The process facilitates cross-examination and review of financial reporting among different companies in the market (Barth et al., 2012: Kothari et al., 2010). GAAP promotes the ...

The economy is the major part of every country that is crucial for interpersonal and international relations. American capital markets are ones of the leading markets on an international scale, and their stability guarantees the further strengthening of American economic position. Under the conditions of the multi-party system and the possibility of the negative influence of politics on the country’s economy, it is important that American standard setting remains in the private sector. This paper aims to discuss the role of the concentration of accounting standard settings in the private sector in the issues related to the neutrality ...

MANAGEMENT ACCOUNTING

Introduction Management and financial accounting provide platforms for an organization management to provide informed decision and policies. Organization management uses the budget as the accounting tool in formulation of policies and allocation of resources in different activities. Accounting encompasses the entire body of knowledge that deals with recording and keeping of all financial transactions. It entails identification, recording, classification, verification, and communication of financial information relating to the resources of the organization. On the other hand, financial accounting is a subset of accounting and is concerned with the use of financial data to measure economic performance of the organization. ...

QUESTION 1

Adjusted Trial Balance Statement of Comprehensive Income Balance Sheet QUESTION 2 Financial ratios Financial analysis Analysis of liquidity Current ratio At the of the financial year 2015, the current ratio for British Airways was 0.5965 indicating that its current assets could pay off 59.65% of its short-term liabilities. This further shows that the company had a low liquidity since its current assets were insufficient to meet the short-term obligations (Gibson, 2012, p. 243). The ratio declined from 0.6512 in 2014 and 0.6300 in 2013. The trend shows that the liquidity of British Airways improved in 2014 but declined in ...

Personal Growth Assessment

Introduction In various stages of my life, I have learned that growing up and embracing the challenges that come along is a prerequisite for anyone who desires a successful life. I have brought this mentality to succeed in the study of a degree in finance, which I will need to learn the skills needed to be a competitive financial and analyst in the future. Over the three years, I have been undertaking this course, I have learned a great deal of knowledge in financial analysis, accounting as well as risk assessment which I hope to apply in the near ...

Description of the company

Woodside is an Australian gas and oil company that explores, develops, produces and supplies oil and gas. The company is composed of a portfolio of world-class producing assets, projects and develops in Australia and globally. The company has maintained a strong performance despite the challenges. In December 2015, oil prices reached an 11-year low. The Chairman’s report shows that he is optimistic. The proposed Browse Floating LNG (FLNG) is expected to improve the company’s income. Despite the falling oil prices, the company is confident of a sustainable growth and high returns on shareholders’ investment. It has taken ...

MANAGEMENT ACCOUNTING

Standard Costs Used for Variance Analysis and Favourable/Unfavourable Terminologies with Suitable Examples 8

References 11

Management Accounting Differences between Management Accounting and Financial Accounting and the need for Investing in the latest Accounting Software Audience Served The basic difference between these two accounting fields is that the management accounting is concerned with providing information to internal stakeholders of an organisation such as the senior management, supervisors and employees. In contrast, financial accounting provides information about the financial health of the business to external stakeholders such as potential investors, shareholders (in case of a publicly traded company), tax authorities, lending institutions and ...

Each of the items above is described in order to understand its nature thus identify the correct statement in which it should be posted as indicated. The goal is to ensure each balance is accurately and correctly posted in order to capture the true and fair value of the entity. The three financial statement created are summarized below. The data shows that the medical facility is operating at a surplus since the amount of the unrestricted assets increases during this year. The surplus is fundamental in improving the liquidity of the facility thus guaranteeing on its continuity. In addition, ...

Paper Outline

The objective with this paper is being written is to provide a comprehensive discussion for IAS 16-Plant, Property and Equipment and IAS 40-Investment Property. It is considerable that many a times, be it academicians or nascent professionals, appropriate accounting for property under the provision of IAS has always been the source of confusion. Therefore, this project will detail all the major provisions under IAS 16 and IAS 40 and how each of them differs from each other. As part of this paper, we will first individually detail both the accounting standards and will then illustrate the differences using appropriate ...

Part A - The impact of accounting on the IT Development 4

Part B – Question 1 - Introducing or Upgrading Computerized Accounting Systems 5 (a) Advantages and Disadvantages of using a Computer Accounting System 5

Advantages 5

Disadvantages 5 (b) Considerations when setting up a Computerized Accounting System 6

Completion of an Accounting Cycle 6

Recording all Transactions from Manual Trial Balance 7 Running a Trial or Testing Phase 7 Verification of the Computerized Accounting System 7 (c) Chart of Accounts and Coding Structure is Followed by Impetus Limited 8

Part B – Question 2 - Accounting Packages 8

(a) The Features of an Accounting Package 8

Security 8

Reporting 9 Interdepartmental Operations 10 (b) ‘Module’ in an Accounting Package and its Purpose 10 (c) ‘Integrated’, ‘Semi-Integrated’ and ‘Non-Integrated’ Modules ...

MANAGEMENT ACCOUNTING

Introduction Management and financial accounting provide platforms for an organization management to provide informed decision and policies. Organization management uses the budget as the accounting tool in formulation and allocation of resources in different organization activities. The managers are the custodian of the budgets under the management and financial accounting. Financial statement and records provide viable financial data that helps in organization management especially in decision-making. Therefore, the study focuses on the management and financial accounting and expounding on objectives of the budget in an organization. The study will also provide the need of using variance analysis in organization ...

The airline industry is considered to be highly competitive and therefore airline company managers will need to determine the relevance of their current ERP systems with regards to the applicability of the financial information it generates. This is because the same quantitative and qualitative information is used for both financial and management accounting. However, the main goal of a company is to generate better profitability for its owners while remaining sustainable. This is done by controlling costs while improving revenues through the use of budgets and the standardization of costs and results to variances, which are primarily under management ...

Executive summary

The stock price of Southern Cross Media Group Limited did not show any reaction to the announcement of the 2015 financial results. The stock price increased days before the announcement and the day after the event but declined two days after the announcement. Financial analysis of firm indicates that it has a strong liquidity, and this has improved over the last five years. Its debt to equity ratio has increased due to the capital reduction in accordance with the relevant statute. The year 2015 saw a decline in the profitability of the company although this did not affect the ...

Executive Summary

The paper represents the business plan of an innovative idea that is to introduce training facility center in Florida. There is high scope in the market due to the availability of a large number of cops. The training center will provide all the related facilities to the individuals that can be availed in the training centers. It is the new concept to provide a platform to the trainees for their self-practice. Effective marketing strategies are required to attract customers towards this new center. Sales strategy is prepared that is to provide membership by paying off a subscription fee once. ...

Abstract

The Sarbanes-Oxley Act changed the ethical nature of accounting for publicly traded companies. The Act requires new forms of ethical behavior from companies, such as creating and maintaining a code of conduct that all employees, even executives, must follow. It also requires that they honestly and accurately report financial reports and maintains that the executive officers of a company have the most responsibility in reporting and certifying that the information is correct. The Act also changes the auditor-client relationship by making auditing more independent of the client, establishing an auditing committee overseen by the SEC, and ensuring transparency. The ...

Introduction to PepsiCo Incorporated

PepsiCo is an American multinational company having its origin in the United States. The company is a market leader in the global beverage industry. The biggest and worldwide competitor to PepsiCo is the Coca-Cola Company. PepsiCo serves the worldwide market and gain access to audience by mainly sponsoring sports events, players and teams.

Pro-Forma Financial Statements of PepsiCo Incorporated for 2016 (the next period)

This section is aimed at displaying the financial statements of PepsiCo for the next financial accounting period (2016) as well as the last statements for 2015. The pro-forma income statement and balance sheet are prepared by assuming a ten percent increase in sales revenue and cost ...

The ongoing internationalization process persuaded regulators and businesses worldwide to think of a common global accounting language for business affairs. This move led to the development of IFRS. International Financial Reporting Standards (IFRS), sometimes referred to as International Accounting Standards, is a globally recognized accounting framework for businesses worldwide. The major purpose of this accounting standard is to make company accounts understandable and comparable across international boundaries. Currently, over 110 countries are following the IFRS accounting system in order to address complexities relating to international business affairs. However, the United States has not adopted IFRS yet, and the country ...

Abstract

The narrative report is prepared to provide a clear understanding of the prudence concept and historical information attributed to this concept. The prudence concept was applied in 1989 that was not included in the external references of 2010. The IASB observed that the concept was missing or ignored, so they provided an amended definition of the prudence in accounting. The significance of the inclusion of this concept is necessary to provide a clear and complete view of the financial position of users. The prudence concept is related to neutrality and conservatism, so it is badly affected by the adverse ...

Introduction

As one who have decided to take up an accounting course and later pursue a career in this field, I have always come across the importance of financial accounting in any business organization. However, it was when I finally took this particular course that I gained adequate realization on the significance of the different accounting theories and practices. In reflecting back upon my learning experience in financial accounting, I think that the most profound thing that I learned from this course is the significance of arriving to a complete, relevant and timely financial information for businesses. Further, I found ...

Business Accounting Assignment 1: Business Report on Accounting Practices and Financial Standing of Crafty Limited

Introduction Final Accounts are prepared at the accounting cycle in order to determine the financial state of a business during a designated period. Preparation of final accounts include Manufacturing and Trading account statements, Profit and Loss Account sheets and the Balance Sheet. In order to calculate the amount of profit or loss a business entity has generated within a specified period, the Trading, Profit and Loss Account is prepared; since the Balance Sheet provides a snapshot of the assets and liabilities of a business, its interpretation reveals how financially viable the business is currently; while the most important function ...

Executive Summary

The Financial Accounting Standard Board (FASB) primary point is to build up new bookkeeping gauges and enhance past bookkeeping norms of monetary reporting and money related bookkeeping identified with nongovernmental elements, so they gives exact data to speculators and different clients of budgetary explanations. The paper portrays the FASB current venture identified with protection identified with focused enhancements to the representing long-span protection contracts. The fundamental point of this anticipate is create focused on upgrades to exposures necessities identified with long haul and brief length protection contracts.

Introduction

The Financial Accounting Standard Board (FASB) has been built up in 1973 ...

Response to an Audit Report Inquiry

Dear Dominique, I am writing this email in response to your request for clarification and explanation on the different types of audit reports. Generally, audit reports give an appraisal of a company or business’s financial performance and status during a specified period of time. These reports are usually completed by an independent accounting professional (internal or external), and cover the company’s assets and liabilities. Audit reports represent the auditor’s assessment of the company’s financial position and future status. In many countries, audit reports are required by law if the company is publicly traded or operates ...

Ip Accounting

Accounting equation, Assets= Capital + Liabilities

The transactions effect on the accounting equation for the business will be as follows:

Dr: Cash with $ 6,000. This is an increase in assets. Cr: Capital with $ 6,000. This is an increase in capital. Dr: Cash with $ 2,000. This is an increase in assets. Cr: Borrowing/ debt. This is an increase in liabilities.

Assuming all sales revenues were received in cash, the revenue would be recorded as follows:

Dr: Cash with $ 900. This is an increase in assets Cr: Sales revenue with $ 900. Dr: Expenses with $ 650 Cr: Cash with $ 650. Dr: Drawings with $ 25. Cr: Cash with $ 25. Dr: Interest expenses $ 20 Cr: Interest payable $ 20 This is a representation of the interest expense owing but not yet paid ...

SUMMERY

INTRODUCTION The manufacturing sector, production means making a product either by using a machine or hand or both. It’s a component of goods producing industry. Unlike trading or service businesses that buy products and sell at a higher price to make the profit, manufacturing instead make products that they finally sell. Manufacturing companies that produce and sell goods needs an accounting system that does not solely look at the accounting aspect only but also sale and purchase of the goods. By this, the accounting system for the manufacturing industry is more complex than the service sector does not ...

In cash basis of accounting, revenues are stated on the income statement in the period that the cash was received from the clients. Similarly, the expenses are also recorded on the income statement at the time customers are making cash payment (Warren, Reeve & Fess, 2009). On the other hand, the accrual system report revenues only when they are earned on the income statement. Additionally, this always occurs before the reception of cash from the clients. Moreover, expenses are recorded during the periods of their occurrence or when they expire. That is the period from the date of payment. However, ...

The Financial Accounting and Standard Board (FASB) and the International Accounting Standard Board (IASB) apply to the AT&T Mobility because both are proposing changes in global accounting. Moreover, their rule provides more incentives for companies particularly in changing the terms of the contract in corporations to speed up revenues to achieve quarterly targets. Additionally, the treatment of revenues in AT&T Mobility, the proposal for the changes, may drive the inconsistent allocation of income in particular between its products and payable resources as well as the separation of hosting arrangements. Consequently, AT&T have changed its GAAP accounting to redefine the ...

Abstract

The financial accounting requires management of different accounts related to assets, liabilities, and equity. On the asset side, it could be noted that all companies report current and non-current assets. Managing of current assets is crucial in the short term as they affect the company’s operations. Companies need to have sufficient working capital to avoid disruptions in their routine operations. Too much or too less working capital both have implications for businesses. Therefore, it is important for companies to have an optimal level of working capital that could help them manage their operations efficiently and effectively. From the ...

Accounting and Recording

Summary Financial accounting and reporting is a mode of communication used by different companies to communicate with the investors. This study uses two modes of accounting and reporting recognized by the international accounting and reporting body. The two methods used in this study are the Handelsgesetzbuch, HGB, which are the German commercial code and the US GAAP. The two multinational firms used in this study are from German and USA but operate in the global market. The German firm has its headquarters in Germany but operates in the international market while the USA firm also has it’s headquarter ...

RESEARCH REPORT

INTRODUCTION The French accounting had a long way of establishment and development. More so as France was a country with many colonies throughout the whole world. Despite the fact that the metropolis did not really want to develop thee colonies, as only their resources interested the French government, the French accounting system still had an immense influence on the development of the accounting systems in these countries.

French accounting found its origins under the reign of Louis XIV. The first mention and example of an accounting attempt was undertaken when the French wrote an official document named “Ordonnance”. The ...

John Sunna

IFRS and GAAP are two most commonly used accounting standards. The differences between them complicate the comparability of financial statements of different companies. The accounting bodies understand the necessity of convergence of the two standards. Thus, the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) work on several joint projects to facilitate this process. This paper addresses the differences and similarities between IFRS and GAAP as regards accounting for financial instruments, long-term assets, and liabilities. IFRS 8-1: What are some steps taken by both the FASB and IASB to move to fair value measurement for financial ...

Introduction

Managers are constantly making decisions that affect the operations and the bottom lines of the business. Such decisions could include the stocks in which to invest, when to introduce a new product into the market, how to optimize the profits of a firm, how to assign employees to various tasks, and when to venture into new markets. Managers require information to make correct and timely decisions. Managerial accounting and financial accounting are potent sources of the information that managers require when making decisions. Managerial accounting entails the identification, measurement, and communication of the economic information that is needed by ...

1. Rationale for Selection Investors require financial analysis of a company to make decisions. A financial report is significant for the purpose of providing information regarding the financial position of a company along with the risk factors associated with it. A report is prepared to provide clear and complete information about Apple Inc. that includes all relevant sections that are crucial for an investor. Apple Inc. is an American multinational company that follows GAAP (Generally Accepted Accounting Principles) to prepare financial statements and annual report for its stakeholders. Its financial analysis includes financial ratio analysis, stock price analysis, associated ...

Introduction

The Financial Accounting Standard Board (FASB) is an independent board that incorporates different professionals who are mandated with the responsibility of communicating appropriate standards used for financial accounting and reporting purposes. The concept is referred to as the Accepted Accounting Principles (GAAP) and is often used by organizations in the preparation of financial reporting. Existing standards in FASB face a lot of criticizing for failing to meet the needs of users more effectively as far as financial reporting is considered. The reason why the facets are considered inappropriate and should be amended is that they are not a faithful ...

GAS 14 requires a firm to translate all transactions involving foreign currency into the its functional currency. The standard provides that the functional currency should be identified considering the general economic condition (Drsc.de). Transactions are initially recorded at the spot exchange rate on the date of the transaction. After which, monetary items are translated using the exchange rate on the date of preparing the statements (closing rate). Non-monetary items are translated using the rates used on acquisition. Any losses or gains on translation are recognised in the income statement as profit or loss (Drsc.de). The financial statements of subsidiaries ...

Broader set of Information to be Included in Traditional Financial Reporting

The Main Criticisms of Traditional Financial Reporting The very first criticism on traditional financial reporting is that the use of diverse accounting policies among different companies jeopardises the performance comparison between financial statements. In other words, traditional financial reporting causes businesses to use multiple accounting policies due to which accurate financial comparison becomes difficult. Another argument against traditional financial reporting is that despite performing independent examination of financial records and statements through internal and external audit, the financial records and statements may still contain material misstatements . There is a possibility that some material errors may go undetected during financial ...

The FASB's direction on the utilization of limited assets is another territory of distinction and is taken as a standout amongst the most questionable steps that the FASB has brought concerning net revenue driven associations. The FASB orders the primary dollar discharge technique. Under first dollar discharge, confinements are discharged if unhindered assets are utilized for a reason for which limited assets are accessible. Albeit inward bookkeeping and reporting may not be influenced, the utilization of first dollar discharge changes over beforehand confined assets into unhindered assets essentially in light of the fact that they could have been used. ...

**Business 4465**

Be sure to put your name and student number at the top of the email attachment. Your document must be less than 10 typed pages. Please read the questions carefully. Write all you answers in a word document, label all questions carefully. The best answers are those that answer the questions well and concisely using material within the scope of the course and not irrelevant material from other sources or from the internet. Answers that are beyond the scope of the course will receive no marks. Answers that are not written in the own words of a ...

As per your request, I have prepared guidance on how to account for R&D costs related to the development of Achuin in accordance with the U.S. GAAP. The cost items discussed in the memo include; R&D expenses, purchase of patent, purchase of centrifuge, and the legal fees associated with the patent approval. R&D costs and the costs of purchasing the patent should be expensed while the costs of the centrifuge and the legal fees of applying for the patent should be capitalized. As a rule, R&D costs are expensed in the period they occur because at the time R&D ...

Q1. Accounting standards play a significant role in the financial statements preparation process. The main international standard-setting organization is the International Accounting Standards Board (IASB) headquartered in London. It issues International Financial Reporting Standards (IFRS) which are used in more than 115 countries and is gaining acceptance in other states as well. These standards are also used on most foreign exchanges. Moreover, the IASB also issues framework for financial reporting and international financial reporting interpretations. Besides, the International Organization of Securities Commissions (IOSCO) also plays a significant role in the international standard-setting process. It doesn’t develop accounting standards, ...

As requested, I have come up with an exclusive analysis on how Dylar Pharmaceutical Company (Dylar) should account for all research and development costs related to Achuin that also abides by the generally acceptable accounting principles. The company should highly comply with the principles in reporting of expenses and costs incurred via capitalization, or expensing of R&D costs are expensed. It is then clear that all expenditures incurred during a research and development process should be expensed, and all purchased intangibles with alternative future uses are capitalized. The expenses incurred during a research and development process should be expensed. ...

Introduction

Studying accounting has been one of my interests since I was a child. Being in accounting classes was really enjoyable from the start. However, although studying the concept in class was interesting, I found it more thrilling to put to work some of the skills that I had learned. I was privileged to get an internship at PWC, one of the big four auditing firm, which I started on January 4th the year 2016. Through this internship, I was exposed to real-life accounting and auditing experiences which I had spent the last several years preparing. As such, this report ...

Introduction

The decision as to the form of business structure that one chooses depends on quite a number of things. There are different legal requirements in New Zealand for running different forms of business structures. For instance, there is a minimum number of people of people required to start a private limited company. There are also tax implications in whichever form of business structure that an investor chooses. For instance, for partnerships, only partners are taxed on their share of partnership profits earned (Collier, 2003). On the other hand, limited liability companies are taxed at a corporate tax rate on ...

As per the requirement of the FASB, No. 116 of the SFAS should address the Accounting for Contributions Made and Received. On the other hand, No. 117 should address the Financial Statement of non-profit making organizations. The above statements illustrate how non-profit making companies should make reports on their contributions. Furthermore, it indicates how the contribution of such companies is presented in the financial statements. Therefore, this paper will assess the requirements of the Statement of Financial Accounting Standards (SFAS 116 and 117) and how they influence the financial statements. Statement No. 116 establishes the standards of accounting for ...

GOODWILL CASE

Despite the fact that, a business venture may claim to own numerous intangible assets, not all of its intangible assets qualify to appear on the balance sheet. Intangible assets will only appear on the balance sheet based on the following criteria of restrictions; intangible assets will qualify to appear on the balance sheet only if; the business venture acquired the assets i.e. if the intangible assets are not developed within the business enterprise. Also intangible assets can only appear on the balance sheet if they can be identified in terms of value and have a useful timeline and therefore ...

MANAGEMENT ACCOUNTING – COST CLASSIFICATION, VARIANCE ANALYSIS AND BUDGET PREPARATION

Executive Summary 4 1. Management Accounting, its Importance and Comparison to Financial Accounting 5

Management Accounting versus Financial Accounting 5

2. Different Classifications of Costs (Types, Behaviour, Function and Relevance) with Examples 6 a. Cost Classification by Behaviour 6

Semi-Variable Costs 7 Variable Costs 7 b. Cost Classification by Function 7 c. Cost Classification by Relevance 8 3. Variance Analysis Commonly Derived Variances, Problems and Limitations 9 a. Commonly Derived Variances 9

Material Cost Variance 10

Labour Cost Variance 10 Overhead Variance 10 Controllable Variance 10 b. Problems and Limitations of Variance Analysis 11 4. Different Operational Budgets and their Advantages 11 a. Master Budget 11 b. Operating Budget ...