Contemporary accounting : a strategic approach for users

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