Contemporary accounting : a strategic approach for users

✍ Scribed by Phil Hancock; Mike Bazley; Peter Robinson

• Year: 2020
• Tongue: English
• Leaves: 670
• Edition: 10
• Category: Library

✦ Table of Contents

Prelims
Half title
title
Imprint
Brief contents
Contents
Preface
A new approach
Guide to the text
Guide to the online resources
About the authors
Acknowledgements
Part 1: Financial Accounting
Chapter 1: Introduction to accounting
Learning objectives
Introduction
1.1 What is accounting?
1.2 For what purpose is accounting information used?
1.3 Who uses accounting information?
Internal users
External users
1.4 Limits on the usefulness of accounting information
Accounting as a business function
1.5 Choice of accounting systems
1.6 Regulatory and environmental considerations
1.7 Economic consequences of accounting information
Compensation plans
Debt contracts
Political costs
The dual reason for selection of accounting policies
1.8 Careers in accounting
Accounting firms
Industry and commerce
Not-for-profit entities
Professional membership
Study tools
Chapter 2: Business structures and financial reporting
Learning objectives
Introduction
2.1 Types of business structures
The sole trader
Partnerships
Companies
2.2 Financial statements for a public company
2.3 The framework for setting accounting standards
Financial Reporting Council
Australian Accounting Standards Board
The political nature of accounting standard setting
International Accounting Standards
The Corporations Act
Securities exchange influence on financial reporting
2.4 The conceptual framework
Objectives of a conceptual framework
The Revised Conceptual Framework
2.5 External audits
The auditor
The expectation gap
Independence
Study tools
Chapter 3: Sustainability reporting, ethicsand corporate governance
Learning objectives
3.1 Sustainability reporting
The Global Reporting Initiative (GRI)
Integrated reporting
3.2 Ethics in accounting
3.3 Governance
What is meant by ‘corporate governance’?
Issues in corporate governance
3.4 Board of directors
3.5 Enforcement of corporate governance
Study tools
Chapter 4: Different measurement methods
Learning objectives
4.1 Profit and wealth
4.2 Historic cost
4.3 Replacement cost
4.4 Value in use
4.5 Net realisable value
4.6 Current accounting practice
4.7 Fair value
Conclusion
Study tools
Chapter 5: Presentation of financial position and the worksheet
Learning objectives
Introduction
5.1 Business activities and the worksheet
Common errors in recording of transactions
5.2 Definition and purpose of the balance sheet
The purpose of the balance sheet
5.3 Elements of the balance sheet
Assets
Categories of assets
5.4 Liabilities
Current liabilities
Non-current liabilities
Assets and liabilities
5.5 Owners’ equity
5.6 The balance sheet equation
A simple balance sheet
5.7 Some balance sheet ratios
5.8 Influences on the format of the balance sheet
Types of business
Users of accounts
Limitations of the balance sheet
Format used in the book
Study tools
Chapter 6: Presentation of financial performance and the worksheet
Introduction
Learning objectives
6.1 Financial performance measurement
6.2 Income and revenue
Increases in assets
Decreases in liabilities
Excluding contributions by owners
Revenue recognition
Examples of revenue recognition
6.3 Expenses
Reductions in assets
Increases in liabilities
Excluding distributions to owners
The recognition principle
Examples of expenses
6.4 The profit or loss statement
6.5 Balance sheet and profit or loss statement
6.6 Statement of profit or loss and other comprehensive income
6.7 Factors affecting the format of the profit or loss statement
Types of business
Users of accounts
6.8 Earnings (or profit) management
6.9 The statement of changes in equity
6.10 The worksheet
Study tools
Chapter 7: Presentation of cash flows
Learning objectives
Introduction
7.1 Cash and cash equivalents
7.2 Internal control of cash
7.3 The statement of cash flows
Purpose
7.4 What does a statement of cash flows show?
7.5 Cash flow from operating activities
7.6 Cash flow from investing activities
Cash flow from financing activities
Increase or decrease in cash in the period
Interest, dividends and income tax
Non-cash investing and financing activities
Study tools
Chapter 8: Accounting for selected assets
Learning objectives
Introduction
8.1 Accounts receivable
Bad and doubtful debts
8.2 Accounting policies for bad and doubtful debts and implications for users
8.3 Inventory
Valuing inventory
8.4 Establishing the cost of inventories
AASB 102 Inventories
Effects of price changes
8.5 Accounting policies for inventories and implications for users
8.6 Property, plant and equipment, and depreciation
8.7 Methods of depreciation
Why depreciate?
The straight-line method
The reducing-balance method
Units-of-production method
8.8 Accounting policies for depreciation and implications for users
8.9 Intangible assets
The cost of intangible assets
Research and development
Patents
Copyright
Trademarks or brand names
Franchises
8.10 Accounting for intangible assets
Study tools
Chapter 9: Accounting for selected liabilities and sources of financing
Learning objectives
Introduction
9.1 Accounts payable, provisions and accruals
9.2 Taxation
Temporary differences
9.3 Sources of finance
Short-term finance
Medium-term finance
Long-term finance
9.4 Equity finance
Sole proprietorships
Partnerships
Limited companies
9.5 Classification as equity or debt
9.6 Financing structures and financial risk
Study tools
Chapter 10: Analysis of financial statements
Learning objectives
Introduction
10.1 Users’ information needs
The investor group
Lenders
Employees
Analysts
Auditors
Management
Common information needs
10.2 Projections and predictions
10.3 The common needs explained
10.4 Techniques of analysis
Comparison of financial statements over time
Trend analysis
10.5 Ratio analysis
Benchmarks
Profitability ratios
Efficiency ratios
Short-term solvency ratios
Long-term solvency ratios
10.6 Market-based ratios
10.7 Key limitations of financial statement analysis
Information problems
Comparison problems over time
Comparison problems between entities
Study tools
Chapter 11: From the worksheet to debits and credits
Learning objectives
Introduction
11.1 The traditional approach
11.2 Ledgers, journals and a trial balance
Ledgers
The journal
11.3 End-of-period adjustments
Comparison with the worksheet approach
11.4 Final accounts
11.5 Computerised accounting systems
Study tools
Part 2: Strategic management accounting
Chapter 12: Introduction to strategic management accounting
Learning objectives
Introduction
12.1 Managerial decision making and accounting information
12.2 External stakeholders and access to management and other accounting information
12.3 The organisation as a value chain
The industry value chain
Information technology and the value chain
12.4 Strategic management
Strategy choice
Strategy implementation
12.5 Strategic management and management accounting information
12.6 Factors influencing the form and types of management accounting information
Organisational size as a determinant of management accounting system design
Organisational structure as a determinant of management accounting system design
Technology as a determinant of management accounting system design
Environmental factors as a determinant of management accounting system design
Management accounting information and other organisational settings
12.7 Accounting information systems and organisational control: a behavioural perspective
Study tools
Chapter 13: Performance measurement and evaluation frameworks
Learning objectives
Introduction
13.1 Organisational goals and performance measurement
Performance measurement
13.2 What is a performance measure and what properties should it have?
The strategic nature of performance measures
13.3 Organisational structure and performance measurement systems
Executive remuneration and business performance
13.4 The use of financial measures to assess organisational performance
Investment centres and financial performance measures
13.5 Non-financial measures: an alternative view of organisational performance
13.6 The BSC: a comprehensive performance management framework
Evaluating organisational performance with a Balanced Scorecard
Integrated reporting and the balanced scorecard
Study tools
Chapter 14: Costs and cost behaviour
Learning objectives
Introduction
14.1 Management’s need for information about costs
14.2 Cost behaviours
Linear cost functions
The relevant range of activity
The choice of the independent variable
Variable costs
Fixed costs
Cost behaviour: assumptions and limitations
Estimating costs
14.3 The cost assignment process
Direct and indirect manufacturing costs
Costing systems and the implication for costs
Product and period costs
Past and future manufacturing costs
14.4 Traditional volume-based costing systems and accounting for overhead
Costing methods: absorption and variable costing
Absorbing overheads
Traditional volume-based costing systems
Predetermined overhead absorption rates
14.5 Activity-based costing systems
14.6 Presenting cost information for management purposes: manufacturing statements
Variable costing versus absorption costing
Study tools
Chapter 15: Budgeting and performance reporting
Learning objectives
Introduction
15.1 The purpose of budgets
Encourage planning
Coordinate functions within an organisation
A form of communication
Provide a basis for responsibility accounting
Provide a basis for a control mechanism
Authorise expenditure
Motivate employees
15.2 The budget process
The budget period
15.3 Preparation of the master budget
15.4 Sales and production budgets
15.5 Budgeting for overhead expenditure
Study tools
Chapter 16: Cost-volume-profit analysis
Learning objectives
Introduction
16.1 CVP analysis
Break-even: the general principles of CVP analysis
The underlying assumptions of CVP analysis
16.2 The contribution margin method
The contribution margin ratio
16.3 The margin of safety
16.4 Break-even analysis: models and charts
The total revenue formula
The total cost formula
The total profit formula
The total contribution formula
What happens at the BEP?
The break-even chart
16.5 Limitations of CVP analysis
Study tools
Chapter 17: Accounting for decision making: with and without resource constraints
Learning objectives
Introduction
Decisions where there are no resource constraints
Decisions where there are resource constraints
Mutually exclusive decisions
17.1 Costs and benefits relevant to decision making
Future and sunk (past) costs
Differential (incremental) costs
Avoidable and unavoidable costs
Opportunity costs
Replacement costs
Comparison with traditional costing methods
17.2 Costs and benefits relevant to specific decisions
The meaning of relevance
17.3 Fixed and variable costs and the contribution approach
The range of products
17.4 Closing an unprofitable section: the contribution margin approach
17.5 Decision making with constraints
17.6 The contribution approach with one scarce resource
17.7 Make or buy decisions
Where there is spare capacity
Where there is no spare capacity
17.8 Qualitative factors
Customers
Employees
Competitors
Legal constraints
Suppliers
Study tools
Chapter 18: Capital investment decisions
Learning objectives
Introduction
18.1 The strategic importance of capital investment decisions
18.2 Capital investments and life-cycle issues
18.3 The capital investment decision-making process
18.4 Capital investment: an accrual-based decision tool
Accounting rate of return (ARR)
18.5 Capital investment: Cash-based decision tools
Payback period
Discounted cash-flow techniques
Net present value (NPV)
Internal rate of return (IRR)
Comparison of NPV and IRR
18.6 Qualitative factors and capital investment decisions
18.7 Post-implementation audit
Study tools
Appendix 1
Extracts from Woolworths Ltd 2018 Annual Report
Appendix 2
Present and future value factor tables
Table 1 Future value of $1
Table 2 Present value of $1
Table 3 Future value of $1 per period
Table 4 Present value of $1 per period
Glossary
References
Index