Economic and Financial Management Report: Comprehensive Analysis

This report delves into the core principles of economic and financial management, examining key concepts such as revenue recognition under the accrual basis of accounting, the nature of expenses, and the classification of assets and liabilities. It explores the significance of financial losses and their reporting requirements, emphasizing the importance of understanding these elements for both financial reporting and tax purposes. Furthermore, the report touches upon the growing importance of quantitative and qualitative terms in social and environmental reporting, highlighting the need for sustainable practices in food production and supply chains. It also addresses the effects of inflation on financial statements and evaluates business performance, using real-world examples like the Sainsbury case to illustrate these concepts. The report provides a comprehensive overview of critical aspects of financial management, supported by relevant references.

Running head: ECONOMIC AND FINANCIAL MANAGEMENT
ECONOMIC AND FINANCIAL MANAGEMENT
Name of the Student
Name of the University
Author Note

1ECONOMIC AND FINANCIAL MANAGEMENT
Volume of merchandise sales and consideration for services provided. As per
accounting done on Accrual basis, recording of the revenues are done on the time of delivery
of the merchandise or services, irrespective of cash receipt at the time of delivery (Hasibuan
and Syahrial 2019). Here income is used in palace of revenues in many areas.
In accounting, an expense depicts the cost or spending in the normal course of
business. Here, the cost incurred in doing business is represented by accounts expenses,
which can be illustrated as the summation of all the business activities that might result in a
profit.
The responsibility of the business is to report the loss it suffers to the Federal
government as well as to its owners. Majority of the people naturally gets to understand what
a financial loss is; it is receiving something less in amount than what has been spent in
generating that amount of return. However, a mere recognition of occurrence of the loss is
justified but that loss recognition has to be backed by a proper disclosure of such loss in
financial report as well as for tax purposes.
An asset can be termed as a resource that has an economic value and is controlled and
owned by individuals, businesses, corporation or a country which has a power to generate
future benefits. Assets are either created or bought by the company and is disclosed in the
balance sheet which is expected to enhance the value of the firm in the future.
Liability can be termed as the obligation to do something. In other words, it is the
financial debts of the business originated through the ordinary course of business. Liabilities
can be of two types- limited and unlimited.
Capital can be best illustrated as the financial assets like the funds stored in deposit
accounts or inflow of funds from special financing sources. Capital is often linked with

2ECONOMIC AND FINANCIAL MANAGEMENT
capital assets of an organization where considerable volume of capital is required to expand
or finance the normal course of business.
Quantitative and qualitative terms in social and environmental reporting is becoming
important day-by-day. A troll on the environment has been taken by the poor farming
techniques, and waste of enormous volume of food resulting in malnourishment of billions of
people and farmers are forced to live at a subsistence level. For instance, production of 60 per
cent more food as of 2050, land, energy and water must be used more sustainably and the
objectives of SDG 2.4 have to be met. The Welcome Trust and the Oxford University are
being taken as a strategic partner to conduct a four-year research project covering the aspects
of environment, diet and health. Check more on food production and sustainability in our
supply chains.
Effects of inflation are not considered in the financial statements of the companies.
However, such impact of inflation should be considered while evaluating the business
performance (Jaggi, Khanna and Nidhi 2016).
Sainsbury, the leader in the supermarket business reported a decline in profits and
further estimated a fall in profit due to the Brexit-hit Pound.
The fall in the profit was a result of the combination of rising inflation and intense
competition in the grocery market.
There was a fall in Sainsbury profits from £548 million to £503 million as of march,
accounting for a fall of 8.2 percent profits.

3ECONOMIC AND FINANCIAL MANAGEMENT
References
Hasibuan, R.P.S. and Syahrial, H., 2019, August. Analysis Of The Implementation Effects Of
Accrual-Based Governmental Accounting Standards On The Financial Statement Qualities.
In Proceeding ICOPOID 2019 The 2nd International Conference on Politic of Islamic
Development (Vol. 1, No. 1, pp. 18-29).
Jaggi, C., Khanna, A. and Nidhi, N., 2016. Effects of inflation and time value of money on an
inventory system with deteriorating items and partially backlogged shortages. International
Journal of Industrial Engineering Computations, 7(2), pp.267-282.