Management Accounting Concepts and Practices
Added on 2020-01-07
17 Pages4625 Words164 Views
Finance
|
|
|
FINANCIAL MANAGEMENT ANDACCOUNTING
Table of ContentsFINANCIAL MANAGEMENT AND ACCOUNTING.................................................................1INTRODUCTION ..........................................................................................................................111.1 Legal and regulatory influences on the financial statements and dealt with accountingand reporting standard.................................................................................................................121.2 Implications of legal and regulatory measures on the users using financial statements andhow information needs of the users vary....................................................................................2TASK 2............................................................................................................................................311) Calculation of Cost of production ........................................................................................322) Performance indicators to identify the potential improvements..........................................63A) Income statements for the year ended.................................................................................64B) Comprehensive income statements......................................................................................7TASK 3............................................................................................................................................91Consolidated and summarized statement of comprehensive income financial positionstatements for X parent company................................................................................................9TASK 4..........................................................................................................................................101A] Calculation of ratios for the year ended on 30/9/2013.......................................................102b) Interpretation of the ratios computed for the year 2013.....................................................113C] Memorandum report advising the management of the company.......................................12CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
INTRODUCTION Financial management is the process that is highly concern with summarizing, recordingand analysing all the accounting transactions in order to examine the accurate picture oforganisation (Barton and Simko, 2002). By using data extracted from the above processes,financial statements are prepared by the company and same are communicated to the generalpublic. In the present project report, influence of legal and regulatory factors on financialstatements is explained. Along with this, implication of these legal and regulatory factors onfinancial statements will also be depicted. Further, cost of production report has prepared forHoworth and some of the suggestions has been given to the company with an aim to minimizethe costs as well as enhance the value and quality. Apart from this, consolidated income andfinancial position statements have been prepared. Besides this, financial ratios of Ager ltd. forthe year 2012 and 2013 have been computed and the same have been compared.TASK 111.1 Legal and regulatory influences on the financial statements and dealt with accounting andreporting standardCompanies act 2006: This act was established by the parliament of UK which includesthe primary sources of Company law. This act handles the working of all the companies. Thisact includes 1300 sections covered in 700 pages and includes 16 schedules. Further, it wasfinally came into existence on 1st October 2009 (Bromwich and Bhimani, 2005). This actincludes various provisions related to the duties and responsibilities of directors. Companies act,2006 also includes various provisions related to the public and private companies. As per this law, every organisation is required to maintain a complete record of all itsassets, liabilities, income, expenses, sales and inventories. In addition to this, they are required tocombine the subsidiaries account and then, publish all these statements for the general public. If,company is not able to do this then as per the section 386, officer is liable to be punished andimprisoned. Section 388 says that every organisation is required to keep the complete record ofall the transactions so that they can be checked anytime by the inspected officer. Section 386says that it is mandatory for all the companies to prepare balance sheet and income statementswhich tell about the profit and loss of business.
International accounting standards: This is one of the oldest set of standards which statesa particular types of transactions that influence the financial statements. These standards wereissued by the International Board of Accounting and Standard Committee (IASC). In the year2001, new and more advanced standards were set which were known as International FinancialReporting Standards (IFRS). This act includes various clauses about transcription the assets,liabilities, inventories, earning per share, dividend per share, foreign exchange rate, expenditure,income, joint ventures, staff benefits, lease contract, intangible assets, fixed assets, investmentand many more things (Burns and Scapens, 2000).International financial and reporting standards (IFRS): These standards are set tounderstand and compare the financial statements of all the companies across the geographicalboundaries. Increase in international shareholding and trade is one of the main causes for theestablishment of these standards. IFRS is successfully replacing the national accountingstandards of various countries. The main motive of IFRS is to furnish all the information relatedto assets, liabilities, revenue, income, profit & loss and so on. Set up of these standards provideassistance to the company to make the international transaction easily (Burns and Vaivio, 2001).Some of the basis characteristics of IFRS include going concern concept, offsetting, consistency,fair presentation, reporting frequency and accrual accounting basis. IFRS also requires that everyorganisation should prepare the cash flow statements, income statements, balance sheet,statements related to equity, retained earnings etc.21.2 Implications of legal and regulatory measures on the users using financial statements andhow information needs of the users vary.There are different types of users of the financial statements of company. Some of them areinternally present and some are the external users. Internal users include directors, employeesand owners while external users include creditors, suppliers, investors, government, competitorand many more. These all users require different types of financial information. Internal usersDirectors: Directors are the ones who form various strategies with an aim to operate theorganisational activities in an effective manner, which in turn will help company to achieve itsdesired objectives. They use financial statements to examine the financial performance andposition of company. On the basis of income statements, they try to analysis in detail about the2
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Behavioral Finance and Accounting Researchlg...
|17
|5098
|327
Financial Statement Analysis: Atlas plclg...
|8
|1222
|330
Financial Statement Analysislg...
|28
|5743
|43
Financial Analysis and Performance of ABC: A Comparative Studylg...
|23
|5057
|163
Accounting Standards and Practiceslg...
|25
|7868
|170
Analysis of Financial Statements of Unloc Ltdlg...
|5
|1072
|70