...Limitations of Historical Costing in times of Inflation Historical Cost accounting and its significance History of Historical Cost Accounting Techniques of Historical Cost Accounting Conclusion References: 1 2 3 *** The impact of inflation comes in the form of rising prices of output and assets. As the financial accounts are kept on Historical cost basis, so they don't take into consideration the impact of rise in the prices of assets and output. This may sometimes result into the overstated profits, under priced assets and misleading picture of Business etc. So, the financial statements prepared under historical accounting are generally proved to be statements of historical facts and do not reflect the current worth of business. This deprives the users of accounts like management, shareholders, and creditors etc. to have a right picture of business to make appropriate decisions. Hence, this leads towards the need for Inflation Accounting. Inflation accounting is a term describing a range of accounting systems designed to correct problems arising from historical cost accounting in the presence of inflation. The significance of inflation accounting emerges from the inherent limitations of the historical cost accounting system. Following are the limitations of historical accounting: 1. Historical accounts do not consider the unrealised holding gains arising from the rise in the monetary value of the assets due to inflation. 2. The objective of charging depreciation...
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...RELEVANCE OF CORPORATE REPORTING BASED ON HISTORICAL ACCOUNTING PRACTICE HAS CONTINUED TO GENERATE INTENSIVE DEBATES OF DIFFERENT FORCES IN THE WORLD, WHICH IS ESPECIALLY TRUE IN A HIGH INFLATIONARY AND DISTORTED ECONOMY LIKE NIGERIA. DISCUSS THE STATEMENT IN RELATION TO JUSTIFICATION FOR INFLATION ACCOUNTING IN NIGERIA. NOVEMBER, 2011. INTRODUCTION Inflation account is a system of accounting which, unlike historical cost accounting takes into account changing prices. Inflation accounting is a term describing a range of accounting systems designed to correct problems arising from historical cost. Historical cost basis in financial statements Historical cost accounting became more widespread after values overstated during the 1920s were reversed during the great depression of 1930s. Most principles of historical cost accounting were developed after the Wall Street crash of 1929, including the presumption of a stable currency. Under a historical cost based system of accounting, inflation leads to two basic problems, first, many of the historical numbers appearing on financial are not economically relevant because prices have changed since they were incurred. Second, since the numbers on financial statements represent dollars expended at different points of time and, in turn, embody different amounts of purchasing power, they are simply not additive. In most countries, primary financial statements are prepared on historical cost basis of accounting without regard...
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...as effective management of the funds in a motive of accomplishing the goals and the objectives an organization. It comprises of how to rise capital and how to allocate for instance through budgeting. This does not only cater for the long term budget but also the allocation of funds in the short term. In our discussion we are going to focus on various issues such the various methods used in costing, the budgeting formation and formation process, and the different types of budgeting. The attainment of coordination will also be factored since it is key to the success of a business. Task 1 Assessment criteria 1.1 a. Identify and explain the various ways by which cost can be classified discussion the value of costs classification including any weaknesses in your argument In the world of business there are a range of costing methods are actually used by the enterprises in evaluation and the analyzing the cost of production when contrasted with the value of other substitutes. In executing the cost, two principle methods are used. Cost analyses deals with procedure of costing and the job costing order, deals with relationship of expenses incurred in...
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...INTRODUCTION Life cycle costing is an alternative approach to cost management which accumulates and manages cost over a product’s lie cycle (Adamany & Gonsalves, 1994; Artto, 1994; Susman, 1989). There are two important aspects to life cycle costing which is the focus on the product cost and the inclusion of upstream and downstream costs. Upstream cost is incurred when company prepares to start its production process. These upstream costs can range from raw materials to research and development to product design. Upstream costs can have a significant impact on the efficiency and profitability of the production process. If raw materials are too expensive or if the design of a new product takes too long, the upstream costs can limit a company's potential profits before a single unit becomes available for sale. While downstream cost is incurred after a company has completed its production process, it must still get that product to its customers. The process involved in delivering those products to the customers is the source of the company's downstream costs. These downstream costs can range from distribution expenses to marketing plans to sales channels. Downstream costs also act as a determining factor in the company's profitability. If distribution costs are too high or sales efforts are ineffective, the downstream costs will eat away at expected revenues. The product life cycle is most frequently understood to mean the life cycle of a particular product on the market...
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...Internship Report On Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function’ by Syeda Afrina Sarwar ID: 07304063 BRAC Business School BRAC University, Bangladesh August 2011 ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function’ Submitted By: Syeda Afrina Sarwar ID: 07304063 BRAC Business School Submitted To: ------------------------------------------------Ms. Rahnuma Ahmed Lecturer BRAC Business School BRAC University, Bangladesh August 2011 Letter of Transmittal August 10, 2011 Ms. Rahnuma Ahmed Lecturer BRAC BUSINESS SCHOOL BRAC University 66, Mohakhali Dhaka-1212 Subject: Submission of Internship Report Dear Madam, I am submitting an internship report titled for ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review of Costing Function’ as a part of the requirement of the course. Your guideline has been followed in every aspect of preparing this report. I have really enjoyed working on this project and I hope that my work would meet the level of your expectation. Any query on this report is appreciated. Thank You. Sincerely, Syeda Afrina Sarwar ID:07304063 Acknowledgement It’s difficult for me to thank all of those marvelous people who have contributed something of them to this report. There are of course some very special people who cannot go...
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...Internship Report On Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function’ by Syeda Afrina Sarwar ID: 07304063 BRAC Business School BRAC University, Bangladesh August 2011 ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function’ Submitted By: Syeda Afrina Sarwar ID: 07304063 BRAC Business School Submitted To: ------------------------------------------------Ms. Rahnuma Ahmed Lecturer BRAC Business School BRAC University, Bangladesh August 2011 Letter of Transmittal August 10, 2011 Ms. Rahnuma Ahmed Lecturer BRAC BUSINESS SCHOOL BRAC University 66, Mohakhali Dhaka-1212 Subject: Submission of Internship Report Dear Madam, I am submitting an internship report titled for ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review of Costing Function’ as a part of the requirement of the course. Your guideline has been followed in every aspect of preparing this report. I have really enjoyed working on this project and I hope that my work would meet the level of your expectation. Any query on this report is appreciated. Thank You. Sincerely, Syeda Afrina Sarwar ID:07304063 Acknowledgement It’s difficult for me to thank all of those marvelous people who have contributed something of them to this report. There are of course some very special people who cannot go...
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...Organization Overview or Profile of the Organization Beximco Pharmaceutical Ltd. is a leading edge pharmaceutical company based in Dhaka, Bangladesh and is a member of the Beximco Group. The history of pharmaceutical business of the company dates back to the early 70s, when it started to import market and distribute medicines from world renowned companies like Upjohn Inc. of USA and Bayer AG of Germany. Since the very beginning, the company was highly successful in generating increased demand for its products which eventually justified local production. It completed its registration in 1976 and started its operation in 1980 by manufacturing and marketing licensee products of Bayer AG of Germany and Upjohn Inc. of USA. After its initial years of struggle it broke ground with the launching of its own products in 1983. In 1985 BPL was listed in Dhaka Stock Exchange (DSE) as a Public Limited Company. The journey continued and barrier after barrier were crossed, challenges were faced and overcome to transform BPL into what it is at present. Now it has grown to become nation's one of the leading pharmaceutical companies, supplying more than 10% of the country's total medicine need. In the process, it was enlisted in Chittagong and London Stock Exchange. Today Beximco manufactures and markets its own `branded generics' for almost all diseases from AIDS to cancer, from infection to asthma, from hypertension to diabetes for both national and international markets ( Beximco Pharmaceutical...
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...A COMPARATIVE STUDY OF STANDARD COSTING SYSTEMS OF TWO COMPANIES CERTIFICATE FROM THE ORGANISATION TABLE OF CONTENTS Sr. No. | Chapter Name | Page No. | 1. | Acknowledgement | 5 | 2. | Preface | 6 | 3. | Objective and Introduction | 7 | 4. | A Brief about the two Companies | 8 | 5. | Standard Costing System | 12 | 6. | Findings | 15 | 7. | Conclusion | 17 | ACKNOWLEDGEMENT We owe much gratitude to all the people who have helped and supported us during the conduct of this project. Our sincere thanks to our Professor Prof. L.N. CHOPDE for giving us the opportunity of practically studying standard costing systems of organizations with the help of this project. He has been a perfect guide through all the lectures and has helped a lot throughout the preparation of the project. Our deep sense of gratefulness to Mr. Anil Rasal for his support and guidance. Thank and appreciation to the staff of both the banks for their support too. We would also like to thank the institution – M.E.T. College and the faculty members without whom this project would have been a distant reality. PREFACE Comparative Study of Accounting System of Gunnebo India Pvt. Ltd and Ashok Leyland Ltd.: As part of the project we have studied the standard costing systems and the general accounting related to it followed by Gunnebo India Pvt. Ltd and Ashok Leyland Ltd. As per the guidelines given for the project we have taken the two companies. Both are manufacturing...
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...FIRST SEMESTER Course : 1: Principles of Management Introduction: - Concept of Management, Scope, Functions and Principles of Management, Evolution of Management thought. 2. Planning: - The Process of Planning, Objectives, Policy and Procedures, Forecasting and Decision Making. 3. Organizing: - Meaning, Importance and Principles, Span of Management, Centralization and Decentralization, Patterns of Organization, Line and Staff Relationships. 4. Staffing: - Nature & Scope of Staffing, Manpower Planning, Selection & Training, Performance Appraisal. 5. Controlling: - Concept or Managerial Control, Control aids, Score Responsibilities of Managers. Books Recommended: by Paul Hersey & Ken Blanchard 1. Management & Organizations Behaviour 2. Essentials of Management by Koontz & O Donald 3. Principal and Practice of Management by L.M. Prasad 4. Human Behavior at Work by Kaith Devis 5. Organizational Behavior by Robbins 1. Course : 2: Business Organization Introduction: - Nature & Scope of Business System, Objectives of Business and Social Responsibilities of Business 2. Organizing a Business: - Forms of Ownership Organization Sole Proprietor, Partnership, Private & Public Ltd. Companies, Choice of suitable form of Business Organization. Public Sector: - Central Government, Public Corporation, Local Government, Organization 3. neither Public nor Private Sector, Clubs & Society, Cooperative Societies, Worker s Cooperatives, Building Societies. 4. Elements of Insurance: - Meaning and...
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...COMPARATIVE ANALYSIS OF FAIR VALUE AND HISTORICAL COST ACCOUNTING ON REPORTED PROFIT: A STUDY OF SELECTED MANUFACTURING COMPANIES IN NIGERIA BESSONG, PETER KEKUNG and CHARLES, EFFIONG DEPARTMENT OF ACCOUNTING FACULTY OF MANAGEMENT SCIENCES UNIVERSITY OF CALABAR, P.M.B.1115, CALABAR, CROSS RIVER STATE, NIGERIA Tel: +234 8037079607 ABSTRACT This study aimed to critically examine the effects of fair value accounting and historical cost accounting on the reported profits. However, since the major objective of any business organization is to make profit and continue in business, what they face in the course of doing their business and the method of accounting they use in reporting their profit may make this noble objective to be unrealistic particularly during inflationary period. Data were collected from both primary and secondary sources and presented and analyzed using ordinary least square. The study revealed that both historical cost and fair-value accounting have significant effect on reported profit. Conclusively, Based on the findings of the study, it is concluded that the amount calculated as depreciation, charged as taxes and paid as dividends greatly influence the operating profit of the company. This simply means that the method of profit measurement will greatly influence the amount charged as taxes, depreciation and dividend on the profit of the company. The study recommended that companies should prepare their financial report using both historical cost and fair-value methods...
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...Second Year - Third Semester 3.0.1 International Business - University Assessment 100 Marks Course Content 1. Overview of the International Business Process 2. PEST factors affecting International Business 3. Government influence on trade 4. International Trade Theories 5. FDI 6. Country Evaluation and Selection 7. Collaborative Strategies 8. International Marketing 9. International Trade Agreements 10. International Trade Organizations 11. Forex 12. International HR Strategies 13. International Diplomacy Reference Text 1. International Business – Daniels and Radebough 2. International Business – Sundaram and Black 3. International Business – Roebuck and Simon 4. International Business – Charles Hill 5. International Business – Subba Rao 3.0.2 Strategic management 100 Marks Course Content 1. Strategic Management Process: Vision, Mission, Goal, Philosophy, Policies of an Organization. 2. Strategy, Strategy as planned action, Its importance, Process and advantages of planning Strategic v/s Operational Planning. 3. Decision making and problem solving, Categories of problems, Problem solving skill, Group decision making, Phases indecision making. 4. Communication, Commitment and performance, Role of the leader, Manager v/s Leader, Leadership styles. 5. Conventional Strategic Management v/s Unconventional Strategic Management, The differences, Changed Circumstance 6. Growth Accelerators: Business Web, Market Power, Learning based. 7. Management Control, Elements,...
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...The Research Proposal For The Relationship among Shanghai Commercial Housing Price and Four Variables, Disposable Income, Completed Housing Area, Interest Rate, and Inflation Rate (2007-2010) BY FIN (2) Yang Bohan 0730200084 Tel: 13750016724 Guo Bingyu Liu Yuanjia Xia Jinjing Teng Linyan Li Hui 0730100034 0730100086 0730200079 0730200063 0730200148 Beijing Normal University – Hong Kong Baptist University United International College May 14, 2010 0 Table of Content 1. 2. 3. 4. 6. 7. 8. Title ........................................................................................................................................... 4 Introduction ..............................................................................
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...of decreasing return to scale 6. Distinguish between economist’s and accountant’s approach to cvp analysis 7. Define the term of “profit volume ratio”. 8. Definition of cost behavior 9. Types and examples for each of the cost behaviour 10. Which should be less and more? 11. How are graphs for each types of cost behaviour? 12. Why in the short-term, some costs and revenues are not relevant for decision making? 13. What would be the effect on the profits if we reduce selling price and sell more units? 14. Should we pay workers on a basis salary only/commission only/combinations? 15. How would changes in sales volume affect the profits of the firms? 16. Definition of bep 17. Limitation of bep 18. Benefit of (bep) 19. Assumptions in (bep) 20. Computation of bep in units and in value 21. What is the effect on a firm’s (bep) of a lower income tax rate? 22. Can break even analysis to be used to determine the sales level that is needed in order to earn a target net profit? 23. Break even point graph 24. Definitions of sales mix 25. What’s the effect on the company’s profits? 26. What is the assumption in the basis? 27. How to calculate and example? 28. How does sales mix affect the contribution margin? 29. Definition of mos 30. How to compute of mos? 31. Usefullness of (mos) 32. Can (mos) be negative? BUDGETING 1. What is definition...
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...important skills that an organization can have. Creating and implementing budgets are the most important activities a public administration can undertake. No public program can exist without fund. Budgeting was defined as "a valuation of receipts and expenditures or a public balance sheet, and as a legislative act establishing and authorizing certain kinds and amounts of expenditures and taxation" (Schiesl, 1977). Budgeting is a collective process in which operating units prepare their plans in conformity with corporate goals published by top management. This means budgeting is a number of activities performed in order to prepare a budget. A budget is a quantitative plan used as a tool for deciding which activities will be chosen for a future time period. A budget is a document that shows how a government agency or public organizations intend to spend resources on activities that accomplish public purposes. A budget is a critical document in the operation of any modern public organization. It has an explicit meaning and it has several expected components. In simple terms, a budget is a financial plan that carries forward the financial implications of carrying out a particular planned response to the anticipated operating conditions in a future period, normally a year. The budgeting process is an essential component of management control systems, as it provides a system of planning, coordination and control for management. It is often an arduous process, however, and often...
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...Accountancy Jump to: navigation, search Accountancy (profession)[1] or accounting (methodology) is the measurement, statement or provision of assurance about financial information primarily used by managers, investors, tax authorities and other decision makers to make resource allocation decisions within companies, organizations, and public agencies. The terms derive from the use of financial accounts. Accounting is the discipline of measuring, communicating and interpreting financial activity. Accounting is also widely referred to as the "language of business".[2] Financial accounting is one branch of accounting and historically has involved processes by which financial information about a business is recorded, classified, summarised, interpreted, and communicated; for public companies, this information is generally publicly-accessible. By contrast management accounting information is used within an organisation and is usually confidential and accessible only to a small group, mostly decision-makers. Tax Accounting is the accounting needed to comply with jurisdictional tax regulations. Practitioners of accountancy are known as accountants. There are many professional bodies for accountants throughout the world. Many allow their members to use titles indicating their membership or qualification level. Examples are Chartered Certified Accountant (ACCA or FCCA), Chartered Accountant (FCA, CA or ACA), Management Accountant (ACMA, FCMA or AICWA), Certified Public Accountant...
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